    [House Report 108-147]
    [From the U.S. Government Publishing Office]

    108th Congress                                            Rept. 108-147
                            HOUSE OF REPRESENTATIVES
     1st Session                                                     Part 2

    ======================================================================

                         PROJECT BIOSHIELD ACT OF 2003

                                    _______

                     June 12, 2003.--Ordered to be printed

                                    _______

      Mr. Tom Davis of Virginia, from the Committee on Government Reform,
                            submitted the following

                                  R E P O R T

                            [To accompany H.R. 2122]

          [Including cost estimate of the Congressional Budget Office]

        The Committee on Government Reform, to whom was referred
    the bill (H.R. 2122) to enhance research, development,
    procurement, and use of biomedical countermeasures to respond
    to public health threats affecting national security, and for
    other purposes, having considered the same, report favorably
    thereon with an amendment and recommend that the bill as
    amended do pass.

                                    CONTENTS

                                                                       Page
    Committee Statement and Views....................................    15
    Section-by-Section Analysis......................................    18
    Explanation of Amendments........................................    22
    Committee Consideration..........................................    22
    Application of Law to the Legislative Branch.....................    23
    Statement of Oversight Findings and Recommendations of the
      Committee......................................................    23
    Statement of General Performance Goals and Objectives............    23
    Constitutional Authority Statement...............................    23
    Unfunded Mandate Statement.......................................    23
    Committee Estimate...............................................    23
    Budget Authority and Congressional Budget Office Cost Estimate...    24
    Changes in Existing Law Made by the Bill as Reported.............    33

        The amendment is as follows:
      Strike all after the enacting clause and insert the following:

    SECTION 1. SHORT TITLE.

      This Act may be cited as the ``Project BioShield Act of 2003''.

    SEC. 2. BIOMEDICAL COUNTERMEASURE RESEARCH AND DEVELOPMENT AUTHORITIES.

      (a) In General.--Part B of title III of the Public Health Service Act
    (42 U.S.C. 243 et seq.) is amended by inserting after section 319F the
    following section:

    ``SEC. 319F-1. AUTHORITY FOR USE OF CERTAIN PROCEDURES REGARDING
                        BIOMEDICAL COUNTERMEASURE RESEARCH AND DEVELOPMENT
                        ACTIVITIES.

      ``(a) In General.--
              ``(1) Authority.--In conducting and supporting research and
            development activities regarding biomedical countermeasures
            under section 319F(h), the Secretary may conduct and support
            such activities in accordance with this section if the
            activities concern qualified countermeasures.
              ``(2) Qualified countermeasure.--For purposes of this
            section, the term `qualified countermeasure' means a priority
            countermeasure (as defined in section 319F(h)) that affects
            national security.
              ``(3) Interagency cooperation.--
                      ``(A) In general.--In carrying out activities under
                    this section, the Secretary is authorized, subject to
                    subparagraph (B), to enter into interagency agreements
                    and other collaborative undertakings with other
                    agencies of the United States Government.
                      ``(B) Limitation.--An agreement or undertaking under
                    this paragraph shall not authorize another agency to
                    exercise the authorities provided by this section.
              ``(4) Availability of facilities to the secretary.--In any
            grant or cooperative agreement entered into under the authority
            provided in this section with respect to a biocontainment
            laboratory or other related or ancillary specialized research
            facility that the Secretary determines necessary for the
            purpose of performing, administering, and supporting qualified
            countermeasure research and development, the Secretary may
            provide that the facility that is the object of such grant or
            cooperative agreement shall be available as needed to the
            Secretary to respond to public health emergencies affecting
            national security.
      ``(b) Expedited Procurement Authority.--
              ``(1) Increased simplified acquisition threshold for
            biomedical countermeasure procurements.--
                      ``(A) In general.--For any procurement by the
                    Secretary of property or services for use (as
                    determined by the Secretary) in performing,
                    administering, or supporting qualified countermeasure
                    research or development activities under this section
                    that the Secretary determines necessary to respond to
                    pressing research and development needs under this
                    section, the amount specified in section 4(11) of the
                    Office of Federal Procurement Policy Act (41 U.S.C.
                    403(11)), as applicable pursuant to section 302A(a) of
                    the Federal Property and Administrative Services Act of
                    1949 (41 U.S.C. 252a(a)), shall be deemed to be
                    $25,000,000 in the administration, with respect to such
                    procurement, of--
                              ``(i) section 303(g)(1)(A) of the Federal
                            Property and Administrative Services Act of
                            1949 (41 U.S.C. 253(g)(1)(A)) and its
                            implementing regulations; and
                              ``(ii) section 302A(b) of such Act (41 U.S.C.
                            252a(b)) and its implementing regulations.
                      ``(B) Application of certain provisions.--
                    Notwithstanding subparagraph (A) and the provision of
                    law and regulations referred to in such subparagraph,
                    each of the following provisions shall apply to
                    procurements described in this paragraph to the same
                    extent that such provisions would apply to such
                    procurements in the absence of subparagraph (A):
                              ``(i) Chapter 37 of title 40, United States
                            Code (relating to contract work hours and
                            safety standards).
                              ``(ii) Subsections (a) and (b) of section 7
                            of the Anti-Kickback Act of 1986 (41 U.S.C.
                            57(a) and (b)).
                              ``(iii) Section 304C of the Federal Property
                            and Administrative Services Act of 1949 (41
                            U.S.C. 254d) (relating to the examination of
                            contractor records).
                      ``(C) Internal controls to be instituted.--The
                    Secretary shall institute appropriate internal controls
                    for procurements that are under this paragraph,
                    including requirements with regard to documenting the
                    justification for use of the authority in this
                    paragraph.
              ``(2) Other than full and open competition.--(A) In using the
            authority provided in section 303(c)(1) of title III of the
            Federal Property and Administrative Services Act of 1949 (41
            U.S.C. 253(c)(1)) to use procedures other than competitive
            procedures in the case of a procurement described in paragraph
            (1) of this subsection, the phrase `available from only one
            responsible source' in such section 303(c)(1) shall be deemed
            to mean `available from only one responsible source or only
            from a limited number of responsible sources'.
              ``(B) The authority under subparagraph (A) is in addition to
            any other authority to use procedures other than competitive
            procedures.
              ``(C) The Secretary shall implement this paragraph in
            accordance with applicable government-wide regulations,
            including requirements that offers be solicited from as many
            potential sources as is practicable under the circumstances,
            that required notices be published, and that submitted offers
            be considered.
              ``(3) Increased micropurchase threshold.--
                      ``(A) In general.--For a procurement described by
                    paragraph (1), the amount specified in subsections (c),
                    (d), and (f) of section 32 of the Office of Federal
                    Procurement Policy Act (41 U.S.C. 428) shall be deemed
                    to be $15,000 in the administration of that section
                    with respect to such procurement.
                      ``(B) Internal controls to be instituted.--The
                    Secretary shall institute appropriate internal controls
                    for purchases that are under this paragraph and that
                    are greater than $2,500.
                      ``(C) Exception to preference for purchase card
                    mechanism.--No provision of law establishing a
                    preference for using a Government purchase card method
                    for purchases shall apply to purchases that are under
                    this paragraph and that are greater than $2,500.
      ``(c) Authority To Expedite Peer Review.--
              ``(1) In general.--The Secretary may, as the Secretary
            determines necessary to respond to pressing qualified
            countermeasure research and development needs under this
            section, employ such expedited peer review procedures
            (including consultation with appropriate scientific experts) as
            the Secretary, in consultation with the Director of NIH, deems
            appropriate to obtain assessment of scientific and technical
            merit and likely contribution to the field of qualified
            countermeasure research, in place of the peer review and
            advisory council review procedures that would be required under
            sections 301(a)(3), 405(b)(1)(B), 405(b)(2), 406(a)(3)(A), 492,
            and 494, as applicable to a grant, contract, or cooperative
            agreement--
                      ``(A) that is for performing, administering, or
                    supporting qualified countermeasure research and
                    development activities; and
                      ``(B) the amount of which is not greater than
                    $1,500,000.
              ``(2) Subsequent phases of research.--The Secretary's
            determination of whether to employ expedited peer review with
            respect to subsequent phases of a research grant or cooperative
            agreement under this section shall be determined without regard
            to the peer review procedures used for any prior peer review of
            that same grant or cooperative agreement.
      ``(d) Authority for Personal Services Contracts.--
              ``(1) In general.--For the purpose of performing,
            administering, and supporting qualified countermeasure research
            and development activities, the Secretary may, as the Secretary
            determines necessary to respond to pressing qualified
            countermeasure research and development needs under this
            section, obtain by contract (in accordance with section 3109 of
            title 5, United States Code, but without regard to the
            limitations in such section on the period of service and on
            pay) the personal services of experts or consultants who have
            scientific or other professional qualifications, except that in
            no case shall the compensation provided to any such expert or
            consultant exceed the daily equivalent of the annual rate of
            compensation for the President.
              ``(2) Federal tort claims act coverage.--
                      ``(A) In general.--A person carrying out a contract
                    under paragraph (1), and an officer, employee, or
                    governing board member of such person, shall be deemed
                    to be an employee of the Department of Health and Human
                    Services for purposes of claims under sections 1346(b)
                    and 2672 of title 28, United States Code, for money
                    damages for personal injury, including death, resulting
                    from performance of functions under such contract.
                      ``(B) Exclusivity of remedy.--The remedy provided by
                    subparagraph (A) shall be exclusive of any other civil
                    action or proceeding by reason of the same subject
                    matter against the person, officer, employee, or
                    governing board member.
              ``(3) Internal controls to be instituted.--
                      ``(A) In general.--The Secretary shall institute
                    appropriate internal controls for contracts under this
                    subsection, including procedures for the Secretary to
                    make a determination of whether a person, or an
                    officer, employee, or governing board member of a
                    person, is deemed to be an employee of the Department
                    of Health and Human Services pursuant to paragraph (2).
                      ``(B) Determination of employee status to be final.--
                    A determination by the Secretary under subparagraph (A)
                    that a person, or an officer, employee, or governing
                    board member of a person, is or is not deemed to be an
                    employee of the Department of Health and Human Services
                    shall be final and binding on the Secretary and the
                    Attorney General and other parties to any civil action
                    or proceeding.
              ``(4) Number of personal services contracts limited.--The
            number of experts and consultants whose personal services are
            obtained under paragraph (1) shall not exceed 30 at any time.
      ``(e) Streamlined Personnel Authority.--
              ``(1) In general.--In addition to any other personnel
            authorities, the Secretary may, as the Secretary determines
            necessary to respond to pressing qualified countermeasure
            research and development needs under this section, without
            regard to such provisions of title 5, United States Code,
            governing appointments in the competitive service, and without
            regard to the provisions of chapter 51 and subchapter III of
            chapter 53 of such title relating to classification and General
            Schedule pay rates, appoint professional and technical
            employees, not to exceed 30 such employees at any time, to
            positions in the National Institutes of Health to perform,
            administer, or support qualified countermeasure research and
            development activities in carrying out this section.
              ``(2) Internal controls to be instituted.--The Secretary
            shall institute appropriate internal controls for appointments
            under this subsection.
      ``(f) Actions Committed to Agency Discretion.--Actions by the
    Secretary under the authority of this section are committed to agency
    discretion.
      ``(g) Effect on Right To File Protest.--Nothing in this section shall
    affect the right of an interested party to file a protest with the
    contracting agency, to file a protest with the Comptroller General
    under subchapter V of chapter 35 of title 31, United States Code, or to
    file an action in the United States Court of Federal Claims under
    section 1491(b) of title 28, United States Code.''.
      (b) Technical Amendment.--Section 481A of the Public Health Service
    Act (42 U.S.C. 287a-2) is amended--
              (1) in subsection (a)(1), by inserting ``or the Director of
            the National Institute of Allergy and Infectious Diseases''
            after ``Director of the Center'';
              (2) in subsection (c)--
                      (A) in paragraph (1), by inserting ``or the Director
                    of the National Institute of Allergy and Infectious
                    Diseases'' after ``Director of the Center''; and
                      (B) in paragraph (2), in the matter preceding
                    subparagraph (A), by striking ``subsection (i)'' and
                    inserting ``subsection (i)(1)'';
              (3) in subsection (d), by inserting ``or the Director of the
            National Institute of Allergy and Infectious Diseases'' after
            ``Director of the Center'';
              (4) in subsection (e)--
                      (A) in paragraph (1)--
                              (i) in the matter preceding subparagraph (A),
                            by inserting ``or the Director of the National
                            Institute of Allergy and Infectious Diseases''
                            after ``Director of the Center'';
                              (ii) in subparagraph (A), by inserting ``(or,
                            in the case of the Institute, 75 percent)''
                            after ``50 percent''; and
                              (iii) in subparagraph (B), by inserting
                            ``(or, in the case of the Institute, 75
                            percent)'' after ``40 percent'';
                      (B) in paragraph (2), by inserting ``or the Director
                    of the National Institute of Allergy and Infectious
                    Diseases'' after ``Director of the Center''; and
                      (C) in paragraph (4), by inserting ``of the Center or
                    the Director of the National Institute of Allergy and
                    Infectious Diseases'' after ``Director'';
              (5) in subsection (f)--
                      (A) in paragraph (1), by inserting ``in the case of
                    an award by the Director of the Center,'' before ``the
                    applicant''; and
                      (B) in paragraph (2), by inserting ``of the Center or
                    the Director of the National Institute of Allergy and
                    Infectious Diseases'' after ``Director''; and
              (6) in subsection (i)--
                      (A) by striking ``Appropriations.--For the purpose of
                    carrying out this section,'' and inserting the
                    following: ``Appropriations.--
              ``(1) Center.--For the purpose of carrying out this section
            with respect to the Center,''; and
                      (B) by adding at the end the following:
              ``(2) National institute of allergy and infectious
            diseases.--For the purpose of carrying out this section with
            respect to the National Institute of Allergy and Infectious
            Diseases, there are authorized to be appropriated such sums as
            may be necessary for fiscal year 2003.''.

    SEC. 3. BIOMEDICAL COUNTERMEASURES PROCUREMENT.

      (a) In General.--Part B of title III of the Public Health Service
    Act, as amended by section 2 of this Act, is amended by inserting after
    section 319F-1 the following section:

    ``SEC. 319F-2. STRATEGIC NATIONAL STOCKPILE.

      ``(a) Strategic National Stockpile.--
              ``(1) In general.--The Secretary of Homeland Security
            (referred to in this section as the `Homeland Security
            Secretary'), in coordination with the Secretary and the
            Secretary of Veterans Affairs, shall maintain a stockpile or
            stockpiles of drugs, vaccines and other biological products,
            medical devices, and other supplies in such numbers, types, and
            amounts as are determined by the Secretary to be appropriate
            and practicable, taking into account other available sources,
            to provide for the emergency health security of the United
            States, including the emergency health security of children and
            other vulnerable populations, in the event of a bioterrorist
            attack or other public health emergency.
              ``(2) Procedures.--The Secretary, in managing the stockpile
            under paragraph (1), shall--
                      ``(A) consult with the working group under section
                    319F(a);
                      ``(B) ensure that adequate procedures are followed
                    with respect to such stockpile for inventory management
                    and accounting, and for the physical security of the
                    stockpile;
                      ``(C) in consultation with Federal, State, and local
                    officials, take into consideration the timing and
                    location of special events;
                      ``(D) review and revise, as appropriate, the contents
                    of the stockpile on a regular basis to ensure that
                    emerging threats, advanced technologies, and new
                    countermeasures are adequately considered;
                      ``(E) devise plans for the effective and timely
                    supply-chain management of the stockpile, in
                    consultation with appropriate Federal, State and local
                    agencies, and the public and private health care
                    infrastructure; and
                      ``(F) ensure the adequate physical security of the
                    stockpile.
      ``(b) Smallpox Vaccine Development.--
              ``(1) In general.--The Secretary shall award contracts, enter
            into cooperative agreements, or carry out such other activities
            as may reasonably be required in order to ensure that the
            stockpile under subsection (a) includes an amount of vaccine
            against smallpox as determined by such Secretary to be
            sufficient to meet the health security needs of the United
            States.
              ``(2) Rule of construction.--Nothing in this section shall be
            construed to limit the private distribution, purchase, or sale
            of vaccines from sources other than the stockpile described in
            subsection (a).
      ``(c) Additional Authority Regarding Procurement of Certain
    Biomedical Countermeasures; Availability of Special Reserve Fund.--
              ``(1) In general.--
                      ``(A) Use of fund.--A security countermeasure may, in
                    accordance with this subsection, be procured with
                    amounts in the special reserve fund under paragraph
                    (10).
                      ``(B) Security countermeasure.--For purposes of this
                    subsection, the term `security countermeasure' means a
                    priority countermeasure (as defined in section
                    319F(h))--
                              ``(i) that affects national security;
                              ``(ii) that is determined under paragraph
                            (2)(B)(ii) to be a necessary countermeasure;
                            and
                              ``(iii)(I) that is approved or cleared under
                            chapter V of the Federal Food, Drug, and
                            Cosmetic Act, or licensed under section 351 of
                            this Act, for use as a countermeasure to a
                            chemical, biological, radiological, or nuclear
                            agent identified as a material threat under
                            paragraph (2)(A)(ii); or
                              ``(II) for which the Secretary determines
                            that sufficient and satisfactory clinical
                            experience or research data (including data, if
                            available, from pre-clinical and clinical
                            trials) support a reasonable conclusion that
                            the countermeasure will qualify for approval or
                            licensing after the date of a determination
                            under paragraph (5).
              ``(2) Determination of material threats.--
                      ``(A) Material threat.--The Homeland Security
                    Secretary, in consultation with the heads of other
                    agencies as appropriate, shall on an ongoing basis--
                              ``(i) assess current and emerging threats of
                            chemical, biological, radiological, and nuclear
                            agents; and
                              ``(ii) determine which of such agents present
                            a material threat against the United States
                            population.
                      ``(B) Public health impact; necessary
                    countermeasures.--The Secretary shall on an ongoing
                    basis--
                              ``(i) assess the potential public health
                            consequences of use against the United States
                            population of agents identified under
                            subparagraph (A)(ii); and
                              ``(ii) determine, on the basis of such
                            assessment, the agents for which priority
                            countermeasures are necessary to protect the
                            public health from a material threat.
              ``(3) Assessment of availability and appropriateness of
            countermeasures.--The Secretary, in consultation with the
            Homeland Security Secretary, shall assess on an ongoing basis
            the availability and appropriateness of specific
            countermeasures to address specific threats identified under
            paragraph (2).
              ``(4) Call for security countermeasures; commitment for
            recommendation for procurement.--
                      ``(A) Proposal to the president.--If, pursuant to an
                    assessment under paragraph (3), the Homeland Security
                    Secretary and the Secretary make a determination that a
                    security countermeasure would be appropriate, such
                    Secretaries may jointly submit to the President a
                    proposal to--
                              ``(i) issue a call for the development of
                            such security countermeasure; and
                              ``(ii) make a commitment that, upon the first
                            development of such security countermeasure
                            that meets the conditions for procurement under
                            paragraph (5), the Secretaries will, based in
                            part on information obtained pursuant to such
                            call, make a recommendation under paragraph (6)
                            that the special reserve fund under paragraph
                            (10) be made available for the procurement of
                            such security countermeasure.
                      ``(B) Countermeasure specifications.--The Homeland
                    Security Secretary and the Secretary shall, to the
                    extent practicable, include in the proposal under
                    subparagraph (A)--
                              ``(i) estimated quantity of purchase (in the
                            form of number of doses or number of effective
                            courses of treatments regardless of dosage
                            form);
                              ``(ii) necessary measures of minimum safety
                            and effectiveness;
                              ``(iii) estimated price for each dose or
                            effective course of treatment regardless of
                            dosage form; and
                              ``(iv) other information that may be
                            necessary to encourage and facilitate research,
                            development, and manufacture of the
                            countermeasure or to provide specifications for
                            the countermeasure.
                      ``(C) Presidential approval.--If the President
                    approves a proposal under subparagraph (A), the
                    Homeland Security Secretary and the Secretary shall
                    make known to persons who may respond to a call for the
                    security countermeasure involved--
                              ``(i) the call for the countermeasure;
                              ``(ii) specifications for the countermeasure
                            under subparagraph (B); and
                              ``(iii) a commitment described in
                            subparagraph (A)(ii).
              ``(5) Secretary's determination of countermeasures
            appropriate for funding from special reserve fund.--
                      ``(A) In general.--The Secretary, in accordance with
                    the provisions of this paragraph, shall identify
                    specific security countermeasures that the Secretary
                    determines, in consultation with the Homeland Security
                    Secretary, to be appropriate for inclusion in the
                    stockpile under subsection (a) pursuant to procurements
                    made with amounts in the special reserve fund under
                    paragraph (10) (referred to in this subsection
                    individually as a `procurement under this subsection').
                      ``(B) Requirements.--In making a determination under
                    subparagraph (A) with respect to a security
                    countermeasure, the Secretary shall determine and
                    consider the following:
                              ``(i) The quantities of the product that will
                            be needed to meet the needs of the stockpile.
                              ``(ii) The feasibility of production and
                            delivery within five years of sufficient
                            quantities of the product.
                              ``(iii) Whether there is a lack of a
                            significant commercial market for the product
                            at the time of procurement, other than as a
                            security countermeasure.
              ``(6) Recommendation for president's approval.--
                      ``(A) Recommendation for procurement.--In the case of
                    a security countermeasure that the Secretary has, in
                    accordance with paragraphs (2), (3), and (5),
                    determined to be appropriate for procurement under this
                    subsection, the Homeland Security Secretary and the
                    Secretary shall jointly submit to the President, in
                    coordination with the Director of the Office of
                    Management and Budget, a recommendation that the
                    special reserve fund under paragraph (10) be made
                    available for the procurement of such countermeasure.
                      ``(B) Presidential approval.--The special reserve
                    fund under paragraph (10) is available for a
                    procurement of a security countermeasure only if the
                    President has approved a recommendation under
                    subparagraph (A) regarding the countermeasure.
                      ``(C) Notice to congress.--The Secretary and the
                    Homeland Security Secretary shall notify the Congress
                    of each decision of the President to approve a
                    recommendation under subparagraph (A). Such notice
                    shall include an explanation of the decision to make
                    available the special reserve fund under paragraph (10)
                    for procurement of such a countermeasure, including,
                    where available, the identification of the potential
                    supplier or suppliers of such countermeasure, and
                    whether other potential suppliers of the same or
                    similar countermeasures were considered and rejected
                    for procurement under this section and the reasons
                    therefor.
                      ``(D) Subsequent specific countermeasures.--
                    Procurement under this subsection of a security
                    countermeasure for a particular purpose does not
                    preclude the subsequent procurement under this
                    subsection of any other security countermeasure for
                    such purpose if the Secretary has determined under
                    paragraph (5)(A) that such countermeasure is
                    appropriate for inclusion in the stockpile and if, as
                    determined by the Secretary, such countermeasure
                    provides improved safety or effectiveness, or for other
                    reasons enhances preparedness to respond to threats of
                    use of a biological, chemical, radiological, or nuclear
                    agent. Such a determination by the Secretary is
                    committed to agency discretion.
                      ``(E) Rule of construction.--Recommendations and
                    approvals under this paragraph apply solely to
                    determinations that the special reserve fund under
                    paragraph (10) will be made available for a procurement
                    of a security countermeasure, and not to the substance
                    of contracts for such procurement or other matters
                    relating to awards of such contracts.
              ``(7) Procurement.--
                      ``(A) In general.--For purposes of a procurement
                    under this subsection that is approved by the President
                    under paragraph (6), the Homeland Security Secretary
                    and the Secretary shall have responsibilities in
                    accordance with subparagraphs (B) and (C).
                      ``(B) Interagency agreements.--
                              ``(i) For procurement.--The Homeland Security
                            Secretary shall enter into an agreement with
                            the Secretary for procurement of a security
                            countermeasure in accordance with the
                            provisions of this paragraph. The special
                            reserve fund under paragraph (10) shall be
                            available for the Secretary's costs of such
                            procurement, other than as provided in clause
                            (ii).
                              ``(ii) For administrative costs.--The
                            agreement entered into between the Homeland
                            Security Secretary and the Secretary for
                            managing the stockpile under subsection (a)
                            shall provide for reimbursement of the
                            Secretary's administrative costs relating to
                            procurements under this subsection.
                      ``(C) Procurement.--
                              ``(i) In general.--The Secretary shall be
                            responsible for--
                                      ``(I) arranging for procurement of a
                                    security countermeasure, including
                                    negotiating terms (including quantity,
                                    production schedule, and price) of, and
                                    entering into, contracts and
                                    cooperative agreements, and for
                                    carrying out such other activities as
                                    may reasonably be required, in
                                    accordance with the provisions of this
                                    subparagraph; and
                                      ``(II) promulgating regulations to
                                    implement clauses (v), (vi), and (vii),
                                    and any other provisions of this
                                    subsection.
                              ``(ii) Contract terms.--A contract for
                            procurements under this subsection shall (or,
                            as specified below, may) include the following
                            terms:
                                      ``(I) Payment conditioned on
                                    substantial delivery.--The contract
                                    shall provide that no payment may be
                                    made until delivery has been made of a
                                    substantial portion (as determined by
                                    the Secretary) of the total number of
                                    units contracted for, except that,
                                    notwithstanding any other provision of
                                    law, the contract may provide that, if
                                    the Secretary determines (in the
                                    Secretary's discretion) that an advance
                                    payment is necessary to ensure success
                                    of a project, the Secretary may pay an
                                    amount, not to exceed 10 percent of the
                                    contract amount, in advance of
                                    delivery. The contract shall provide
                                    that such advance payment is required
                                    to be repaid if there is a failure to
                                    perform under the contract, except in
                                    special circumstances as determined by
                                    the Secretary on a contract by contract
                                    basis.
                                      ``(II) Contract duration.--The
                                    contract shall be for a period not to
                                    exceed five years, except that, in
                                    first awarding the contract, the
                                    Secretary may provide for a longer
                                    duration, not exceeding eight years, if
                                    the Secretary determines that
                                    complexities or other difficulties in
                                    performance under the contract justify
                                    such a period. The contract shall be
                                    renewable for additional periods, none
                                    of which shall exceed five years.
                                      ``(III) Storage by vendor.--The
                                    contract may provide that the vendor
                                    will provide storage for stocks of a
                                    product delivered to the ownership of
                                    the Federal Government under the
                                    contract, for such period and under
                                    such terms and conditions as the
                                    Secretary may specify, and in such case
                                    amounts from the special reserve fund
                                    under paragraph (10) shall be available
                                    for costs of shipping, handling,
                                    storage, and related costs for such
                                    product.
                              ``(iii) Availability of simplified
                            acquisition procedures.--
                                      ``(I) In general.--If the Secretary
                                    determines that there is a pressing
                                    need for a procurement of a specific
                                    countermeasure, the amount of the
                                    procurement under this subsection shall
                                    be deemed to be below the threshold
                                    amount specified in section 4(11) of
                                    the Office of Federal Procurement
                                    Policy Act (41 U.S.C. 403(11)), for
                                    purposes of application to such
                                    procurement, pursuant to section
                                    302A(a) of the Federal Property and
                                    Administrative Services Act of 1949 (41
                                    U.S.C. 252a(a)), of--
                                              ``(aa) section 303(g)(1)(A)
                                            of the Federal Property and
                                            Administrative Services Act of
                                            1949 (41 U.S.C. 253(g)(1)(A))
                                            and its implementing
                                            regulations; and
                                              ``(bb) section 302A(b) of
                                            such Act (41 U.S.C. 252a(b))
                                            and its implementing
                                            regulations.
                                      ``(II) Application of certain
                                    provisions.--Notwithstanding subclause
                                    (I) and the provision of law and
                                    regulations referred to in such clause,
                                    each of the following provisions shall
                                    apply to procurements described in this
                                    clause to the same extent that such
                                    provisions would apply to such
                                    procurements in the absence of
                                    subclause (I):
                                              ``(aa) Chapter 37 of title
                                            40, United States Code
                                            (relating to contract work
                                            hours and safety standards).
                                              ``(bb) Subsections (a) and
                                            (b) of section 7 of the Anti-
                                            Kickback Act of 1986 (41 U.S.C.
                                            57(a) and (b)).
                                              ``(cc) Section 304C of the
                                            Federal Property and
                                            Administrative Services Act of
                                            1949 (41 U.S.C. 254d) (relating
                                            to the examination of
                                            contractor records).
                              ``(iv) Other than full and open
                            competition.--(I) In using the authority
                            provided in section 303(c)(1) of title III of
                            the Federal Property and Administrative
                            Services Act of 1949 (41 U.S.C. 253(c)(1)) to
                            use procedures other than competitive
                            procedures in the case of a procurement under
                            this subsection, the phrase `available from
                            only one responsible source' in such section
                            303(c)(1) shall be deemed to mean `available
                            from only one responsible source or only from a
                            limited number of responsible sources'.
                              ``(II) The authority under subclause (I) is
                            in addition to any other authority to use
                            procedures other than competitive procedures.
                              ``(III) The Secretary shall implement this
                            clause in accordance with applicable
                            government-wide regulations, including
                            requirements that offers be solicited from as
                            many potential sources as is practicable under
                            the circumstances, that required notices be
                            published, and that submitted offers be
                            considered.
                              ``(v) Premium provision in multiple award
                            contracts.--
                                      ``(I) In general.--If, under this
                                    subsection, the Secretary enters into
                                    contracts with more than one vendor to
                                    procure a security countermeasure, such
                                    Secretary may, notwithstanding any
                                    other provision of law, include in each
                                    of such contracts a provision that--
                                              ``(aa) identifies an
                                            increment of the total quantity
                                            of security countermeasure
                                            required, whether by percentage
                                            or by numbers of units; and
                                              ``(bb) promises to pay one or
                                            more specified premiums based
                                            on the priority of such
                                            vendors' production and
                                            delivery of the increment
                                            identified under item (aa), in
                                            accordance with the terms and
                                            conditions of the contract.
                                      ``(II) Determination of government's
                                    requirement not reviewable.--If the
                                    Secretary includes in each of a set of
                                    contracts a provision as described in
                                    subclause (I), such Secretary's
                                    determination of the total quantity of
                                    security countermeasure required, and
                                    any amendment of such determination, is
                                    committed to agency discretion.
                              ``(vi) Extension of closing date for receipt
                            of proposals not reviewable.--A decision by the
                            Secretary to extend the closing date for
                            receipt of proposals for a procurement under
                            this subsection is committed to agency
                            discretion.
                              ``(vii) Limiting competition to sources
                            responding to request for information.--In
                            conducting a procurement under this subsection,
                            the Secretary may exclude a source that has not
                            responded to a request for information under
                            section 303A(a)(1)(B) of the Federal Property
                            and Administrative Services Act of 1949 (41
                            U.S.C. 253a(a)(1)(B)) if such request has given
                            notice that the Secretary may so exclude such a
                            source.
              ``(8) Interagency cooperation.--
                      ``(A) In general.--In carrying out activities under
                    this section, the Homeland Security Secretary and the
                    Secretary are authorized, subject to subparagraph (B),
                    to enter into interagency agreements and other
                    collaborative undertakings with other agencies of the
                    United States Government.
                      ``(B) Limitation.--An agreement or undertaking under
                    this paragraph shall not authorize another agency to
                    exercise the authorities provided by this section to
                    the Homeland Security Secretary or to the Secretary.
              ``(9) Restrictions on use of funds.--Amounts in the special
            reserve fund under paragraph (10) shall not be used to pay--
                      ``(A) costs for the purchase of vaccines under
                    procurement contracts entered into before the date of
                    the enactment of the Project BioShield Act of 2003; or
                      ``(B) administrative costs.
              ``(10) Special reserve fund.--For purposes of this
            subsection, the term `special reserve fund' has the meaning
            given such term in section 510 of the Homeland Security Act of
            2002.
      ``(d) Disclosures.--No Federal agency shall disclose under section
    552, United States Code, any information identifying the location at
    which materials in the stockpile under subsection (a) are stored.
      ``(e) Definition.--For purposes of subsection (a), the term
    `stockpile' includes--
              ``(1) a physical accumulation (at one or more locations) of
            the supplies described in subsection (a); or
              ``(2) a contractual agreement between the Homeland Security
            Secretary and a vendor or vendors under which such vendor or
            vendors agree to provide to such Secretary supplies described
            in subsection (a).
      ``(f) Authorization of Appropriations.--
              ``(1) Strategic national stockpile.--For the purpose of
            carrying out subsection (a), there are authorized to be
            appropriated $640,000,000 for fiscal year 2002, and such sums
            as may be necessary for each of fiscal years 2003 through 2006.
            Such authorization is in addition to amounts in the special
            reserve fund under subsection (c)(10).
              ``(2) Smallpox vaccine development.--For the purpose of
            carrying out subsection (b), there are authorized to be
            appropriated $509,000,000 for fiscal year 2002, and such sums
            as may be necessary for each of fiscal years 2003 through
            2006.''.
      (b) Amendment to Homeland Security Act of 2002.--Title V of the
    Homeland Security Act of 2002 (116 Stat. 2212; 6 U.S.C. 311 et seq.) is
    amended by adding at the end the following:

    ``SEC. 510. PROCUREMENT OF SECURITY COUNTERMEASURES FOR STRATEGIC
                        NATIONAL STOCKPILE.

      ``(a) Authorization of Appropriations.--For procurement of security
    countermeasures under section 319F-2(c) of the Public Health Service
    Act (referred to in this section as the `security countermeasures
    program'), there is authorized to be appropriated up to $5,593,000,000
    for the fiscal years 2004 through 2013. Of the amounts appropriated
    under the preceding sentence, not to exceed $3,418,000,000 may be
    obligated during the fiscal years 2004 through 2008, of which not to
    exceed $890,000,000 may be obligated during fiscal year 2004.
      ``(b) Special Reserve Fund.--For purposes of the security
    countermeasures program, the term `special reserve fund' means the
    appropriations account established as a result of any appropriations
    made under subsection (a).
      ``(c) Availability.--
              ``(1) Duration of availability for obligation.--Subject to
            paragraph (2), all amounts appropriated under subsection (a)
            are available for obligation through the end of fiscal year
            2013, provided that any portion of such amount that remains
            unobligated for such purposes on the expiration of such term
            shall be returned to the United States Treasury and shall not
            be available for subsequent obligation for any purpose.
              ``(2) Initial availability for particular procurements.--
            Amounts appropriated under subsection (a) become available for
            a procurement under the security countermeasures program only
            upon the approval by the President of such availability for the
            procurement in accordance with paragraph (6)(B) of such
            program.''.
      (c) Conforming Amendments.--(1) Section 121 of the Public Health
    Security and Bioterrorism Preparedness and Response Act of 2002 (116
    Stat. 611; 42 U.S.C. 300hh-12) is repealed.
      (2) The item relating to section 121 in the table of contents
    (contained in section 1(b)) of such Act is repealed.
      (3) With respect to the program established under former section 121
    of such Act, the repeal of such section under paragraph (1) applies as
    a modification of the program in accordance with the amendment made by
    subsection (a) of this section, and not as the termination of the
    program and the establishment of a different program.

    SEC. 4. AUTHORIZATION FOR MEDICAL PRODUCTS FOR USE IN EMERGENCIES.

      Subchapter E of chapter V of the Federal Food, Drug, and Cosmetic Act
    (21 U.S.C. 360bbb et seq.) is amended by adding at the end the
    following section:

    ``SEC. 564. AUTHORIZATION FOR MEDICAL PRODUCTS FOR USE IN EMERGENCIES.

      ``(a) In General.--
              ``(1) Emergency uses.--Notwithstanding sections 505, 510(k),
            and 515 of this Act and section 351 of the Public Health
            Service Act, and subject to the provisions of this section, the
            Secretary may authorize the introduction into interstate
            commerce, during the effective period of a declaration under
            subsection (b), of a drug or device intended for use in an
            actual or potential emergency (referred to in this section as
            an `emergency use').
              ``(2) Approval status of product.--An authorization under
            paragraph (1) may authorize an emergency use of a product
            that--
                      ``(A) is not approved, licensed, or cleared for
                    commercial distribution under a provision of law
                    referred to in such paragraph (referred to in this
                    section as an `unapproved product'); or
                      ``(B) is approved, licensed, or cleared under such a
                    provision, but which use is not under such provision an
                    approved, licensed, or cleared use of the product
                    (referred to in this section as an `unapproved use of
                    an approved product').
              ``(3) Relation to other uses.--An emergency use authorized
            under paragraph (1) for a product is in addition to any other
            use that is authorized for the product under a provision of law
            referred to in such paragraph.
              ``(4) Definitions.--For purposes of this section:
                      ``(A) The term `emergency use' has the meaning
                    indicated for such term in paragraph (1).
                      ``(B) The term `product' means a drug or device.
                      ``(C) The term `unapproved product' has the meaning
                    indicated for such term in paragraph (2)(A).
                      ``(D) The term `unapproved use of an approved
                    product' has the meaning indicated for such term in
                    paragraph (2)(B).
      ``(b) Declaration of Emergency.--
              ``(1) In general.--The Secretary may declare an emergency
            justifying the authorization under this subsection for a
            product on the basis of--
                      ``(A) a determination by the Secretary of Homeland
                    Security that there is a national emergency, or a
                    significant potential for a national emergency,
                    involving a heightened risk of attack with a specified
                    biological, chemical, radiological, or nuclear agent or
                    agents;
                      ``(B) a determination by the Secretary of Defense
                    that there is a military emergency, or a significant
                    potential for a military emergency, involving a
                    heightened risk to United States military forces of
                    attack with a biological, chemical, radiological, or
                    nuclear agent or agents; or
                      ``(C) a determination by the Secretary of a public
                    health emergency under section 319 of the Public Health
                    Service Act, affecting national security and involving
                    a specified biological, chemical, radiological, or
                    nuclear agent or agents, or a specified disease or
                    condition that may be attributable to such agent or
                    agents.
              ``(2) Termination of declaration.--
                      ``(A) In general.--A declaration under this
                    subsection shall terminate upon the earlier of--
                              ``(i) a determination by the Secretary, in
                            consultation as appropriate with the Secretary
                            of Homeland Security or the Secretary of
                            Defense, that the circumstances described in
                            paragraph (1) have ceased to exist; or
                              ``(ii) the expiration of the one-year period
                            beginning on the date on which the declaration
                            is made.
                      ``(B) Renewal.--Notwithstanding subparagraph (A), the
                    Secretary may renew a declaration under this
                    subsection, and this paragraph shall apply to any such
                    renewal.
              ``(3) Advance notice of termination.--In terminating a
            declaration under this section, the Secretary shall provide
            advance notice that the declaration will be terminated. The
            period of advance notice shall be a period reasonably
            determined to provide--
                      ``(A) in the case of an unapproved product, a
                    sufficient period for disposition of shipments of the
                    product, including the return of such shipments to the
                    manufacturer (in the case of a manufacturer that
                    chooses to have the shipments returned); and
                      ``(B) in the case of unapproved uses of approved
                    products, a sufficient period for the disposition of
                    any labeling that was provided with respect to the
                    emergency use involved.
              ``(4) Publication.--The Secretary shall promptly publish in
            the Federal Register each declaration, determination, and
            renewal under this subsection.
      ``(c) Criteria for Issuance of Authorization.--The Secretary may
    issue an authorization under this section with respect to the emergency
    use of a product only if, after consultation with the Director of the
    National Institutes of Health and the Director of the Centers for
    Disease Control and Prevention, to the extent feasible and appropriate
    given the circumstances of the emergency involved, the Secretary
    concludes--
              ``(1) that an agent specified in a declaration under
            subsection (b) can cause a serious or life-threatening disease
            or condition;
              ``(2) that, based on the totality of scientific evidence
            available to the Secretary, including data from adequate and
            well-controlled clinical trials, if available, it is reasonable
            to believe that--
                      ``(A) the product may be effective in detecting,
                    diagnosing, treating, or preventing--
                              ``(i) such disease or condition; or
                              ``(ii) a serious or life-threatening disease
                            or condition caused by a product authorized
                            under this section or approved under this Act
                            or the Public Health Service Act, for
                            detecting, diagnosing, treating, or preventing
                            such a disease or condition caused by such an
                            agent; and
                      ``(B) the known and potential benefits of the
                    product, when used to detect, diagnose, prevent, or
                    treat such disease or condition, outweigh the known and
                    potential risks of the product;
              ``(3) that there is no adequate, approved, and available
            alternative to the product for detecting, diagnosing,
            preventing, or treating such disease or condition; and
              ``(4) that such other criteria as the Secretary may by
            regulation prescribe are satisfied.
      ``(d) Scope of Authorization.--
              ``(1) In general.--An authorization of a product under this
            section shall state--
                      ``(A) each disease or condition that the product may
                    be used to detect, diagnose, prevent, or treat within
                    the scope of the authorization;
                      ``(B) the Secretary's conclusions, made under
                    subsection (c)(2)(B), that the known and potential
                    benefits of the product, when used to detect, diagnose,
                    prevent, or treat such disease or condition, outweigh
                    the known and potential risks of the product; and
                      ``(C) the Secretary's conclusions, made under
                    subsection (c), concerning the safety and potential
                    effectiveness of the product in detecting, diagnosing,
                    preventing, or treating such diseases or conditions,
                    including an assessment of the available scientific
                    evidence.
              ``(2) Confidential information.--Nothing in this section
            alters or amends section 1905 of title 18, United States Code,
            or section 552(b)(4) of title 5 of such Code.
      ``(e) Conditions of Authorization.--
              ``(1) Unapproved product.--
                      ``(A) Required conditions.--With respect to the
                    emergency use of an unapproved product, the Secretary,
                    to the extent feasible given the circumstances of the
                    emergency, shall, for persons who choose to carry out
                    one or more activities for which the authorization is
                    issued, establish such conditions on an authorization
                    under this section as the Secretary finds necessary or
                    appropriate to protect the public health, including the
                    following:
                              ``(i) Appropriate conditions designed to
                            ensure that, to the extent feasible given the
                            circumstances of the emergency, health care
                            professionals administering the product are
                            informed--
                                      ``(I) that the Secretary has
                                    authorized the emergency use of the
                                    product;
                                      ``(II) of the significant known and
                                    potential benefits and risks of the
                                    emergency use of the product, and of
                                    the extent to which such benefits and
                                    risks are unknown; and
                                      ``(III) of the alternatives to the
                                    product that are available, and of
                                    their benefits and risks.
                              ``(ii) Appropriate conditions designed to
                            ensure that, to the extent feasible given the
                            circumstances of the emergency, individuals to
                            whom the product is administered are informed--
                                      ``(I) that the Secretary has
                                    authorized the emergency use of the
                                    product;
                                      ``(II) of the significant known and
                                    potential benefits and risks of such
                                    use, and of the extent to which such
                                    benefits and risks are unknown; and
                                      ``(III) of the option to accept or
                                    refuse administration of the product,
                                    of the consequences, if any, of
                                    refusing administration of the product,
                                    and of the alternatives to the product
                                    that are available and of their
                                    benefits and risks.
                              ``(iii) Appropriate conditions for the
                            monitoring and reporting of adverse events
                            associated with the emergency use of the
                            product.
                              ``(iv) For manufacturers of the product,
                            appropriate conditions concerning recordkeeping
                            and reporting, including records access by the
                            Secretary, with respect to the emergency use of
                            the product.
                      ``(B) Authority for additional conditions.--With
                    respect to the emergency use of an unapproved product,
                    the Secretary, to the extent feasible given the
                    circumstances of the emergency, may, for persons who
                    choose to carry out one or more activities for which
                    the authorization is issued, establish such conditions
                    on an authorization under this section as the Secretary
                    finds necessary or appropriate to protect the public
                    health, including the following:
                              ``(i) Appropriate conditions on which
                            entities may distribute the product with
                            respect to the emergency use of the product
                            (including limitation to distribution by
                            government entities), and on how distribution
                            is to be performed.
                              ``(ii) Appropriate conditions on who may
                            administer the product with respect to the
                            emergency use of the product, and on the
                            categories of individuals to whom, and the
                            circumstances under which, the product may be
                            administered with respect to such use.
                              ``(iii) For persons other than manufacturers
                            of the product, appropriate conditions
                            concerning recordkeeping and reporting,
                            including records access by the Secretary, with
                            respect to the emergency use of the product.
                              ``(iv) With respect to the emergency use of
                            the product, waive or limit, to the extent
                            appropriate given the circumstances of the
                            emergency, conditions regarding current good
                            manufacturing practice otherwise applicable to
                            the manufacture, processing, packing, or
                            holding of products subject to regulation under
                            this Act, including such requirements
                            established in section 501.
              ``(2) Unapproved use.--With respect to the emergency use of a
            product that is an unapproved use of an approved product:
                      ``(A) The Secretary may, for manufacturers of the
                    product who choose to carry out one or more activities
                    for which the authorization is issued, establish any of
                    the conditions described in clauses (i) through (iv) of
                    paragraph (1)(A).
                      ``(B)(i) If the authorization under this section
                    regarding the emergency use authorizes a change in the
                    labeling of the product, but the manufacturer of the
                    product chooses not to make such change, such
                    authorization may not authorize distributors of the
                    product or any other person to alter or obscure the
                    labeling provided by the manufacturer.
                      ``(ii) In the circumstances described in clause (i),
                    an authorization under this section regarding the
                    emergency use may, for persons who do not manufacture
                    the product and who choose to act under this clause,
                    authorize such persons to provide information on the
                    product in addition to the labeling provided by the
                    manufacturer, subject to compliance with clause (i).
                    Such additional information shall not be considered
                    labeling for purposes of section 502.
      ``(f) Duration of Authorization.--
              ``(1) In general.--Except as provided in paragraph (2), an
            authorization under this section shall be effective until the
            earlier of the termination of the declaration under subsection
            (b) or a revocation under subsection (g).
              ``(2) Continued use after end of effective period.--An
            authorization shall continue to be effective for continued use
            with respect to patients to whom it was administered during the
            period described by paragraph (1), to the extent found
            necessary by such patients' attending physicians.
      ``(g) Revocation of Authorization.--
              ``(1) Review.--The Secretary shall periodically review the
            circumstances and the appropriateness of an authorization under
            this section.
              ``(2) Revocation.--The Secretary may revoke an authorization
            under this section if, in the Secretary's unreviewable
            discretion, the criteria under subsection (c) for issuance of
            such authorization are no longer met.
      ``(h) Publication.--The Secretary shall promptly publish in the
    Federal Register a notice of each authorization, and each termination
    or revocation of an authorization, and an explanation of the reasons
    therefor, under this section.
      ``(i) Actions Committed to Agency Discretion.--Actions under the
    authority of this section by the Secretary, by the Secretary of
    Defense, or by the Secretary of Homeland Security are committed to
    agency discretion.
      ``(j) Rules of Construction.--Nothing in this section shall be
    construed to impair or otherwise affect--
              ``(1) the authority of the President as Commander in Chief of
            the Armed Forces of the United States under article II, section
            2 of the United States Constitution;
              ``(2) the authority of the Secretary of Defense with respect
            to the Department of Defense, including the armed forces, under
            other provisions of Federal law; or
              ``(3) the authority of the Secretary under section 319F-2 to
            manage the stockpile under such section.
      ``(k) Application to Members of Armed Forces.--
              ``(1) Waiver of requirement relating to option to refuse.--In
            the case of administration of a countermeasure to members of
            the armed forces, a requirement, under subsection
            (e)(1)(A)(ii)(III), designed to ensure that individuals are
            informed of an option to accept or refuse administration of a
            product, may be waived by the President if the President
            determines, in writing, that complying with such requirement is
            not feasible, is contrary to the best interests of the members
            affected, or is not in the interests of national security.
              ``(2) Provision of information to member of the armed
            forces.--If the Secretary makes a determination that it is not
            feasible for the information required by subsection
            (e)(1)(A)(ii) to be provided to a member of the armed forces
            prior to the administration of the product, such information
            shall be provided to such member of the armed forces (or next-
            of-kin in the case of the death of a member) to whom the
            product was administered as soon as possible, but not later
            than 30 days, after such administration. Information concerning
            the administration of the product shall be recorded in the
            medical record of the member.
              ``(3) Effect on statute pertaining to investigational new
            drugs.--In the case of an authorization based on a
            determination by the Secretary of Defense under subsection
            (b)(1)(B), section 1107 of title 10, United States Code, shall
            not apply to use of a product that is the subject of such
            authorization, within the scope of such authorization and while
            such authorization is effective.
      ``(l) Relation to Other Provisions.--If a product is the subject of
    an authorization under this section, the use of such product within the
    scope of the author-
    ization--
              ``(1) shall not be subject to any requirements pursuant to
            section 505(i) or 520(g); and
              ``(2) shall not be subject to any requirements otherwise
            applicable to clinical investigations pursuant to other
            provisions of this Act.
      ``(m) Discretion Regarding Use of Authorization.--Nothing in this
    section provides the Secretary any authority to require any person to
    carry out any activity that becomes lawful pursuant to an authorization
    under this section, and no person is required to inform the Secretary
    that the person will not be carrying out such activity, except that a
    manufacturer of a sole-source unapproved product authorized for
    emergency use shall notify the Secretary within a reasonable period of
    time after the issuance by the Secretary of such authorization if such
    manufacturer does not intend to carry out an activity or activities
    under the authorization. This section does not have any legal effect on
    a person who does not carry out any activity for which an authorization
    under this section is issued, or who carries out such an activity
    pursuant to other provisions of this Act or section 351 of the Public
    Health Service Act.
      ``(n) Enforcement.--A person who carries out an activity pursuant to
    an authorization under this section, but who fails to comply with
    applicable conditions under subsection (e), is with respect to that act
    of noncompliance subject to the provisions of law specified in
    subsection (a) and to the enforcement of such provisions under section
    301.''.

    SEC. 5. REPORTS REGARDING AUTHORITIES UNDER THIS ACT.

      (a) Secretary of Health and Human Services.--
              (1) Annual reports on particular exercises of authority.--
                      (A) Relevant authorities.--The Secretary of Health
                    and Human Services (referred to in this subsection as
                    the ``Secretary'') shall submit reports in accordance
                    with subparagraph (B) regarding the exercise of
                    authority under the following provisions of law:
                              (i) With respect to section 319F-1 of the
                            Public Health Service Act (as added by section
                            2 of this Act):
                                      (I) Subsection (b)(1) (relating to
                                    increased simplified acquisition
                                    threshold).
                                      (II) Subsection (b)(2) (relating to
                                    use of noncompetitive procedures).
                                      (III) Subsection (c) (relating to
                                    expedited peer review procedures).
                              (ii) With respect to section 319F-2 of the
                            Public Health Service Act (as added by section
                            3 of this Act):
                                      (I) Subsection (c)(7)(C)(iii)
                                    (relating to simplified acquisition
                                    procedures).
                                      (II) Subsection (c)(7)(C)(iv)
                                    (relating to use of noncompetitive
                                    procedures).
                                      (III) Subsection (c)(7)(C)(v)
                                    (relating to premium provision in
                                    multiple-award contracts).
                              (iii) With respect to section 564 of the
                            Federal Food, Drug, and Cosmetic Act (as added
                            by section 4 of this Act):
                                      (I) Subsection (a)(1) (relating to
                                    emergency uses of certain drugs and
                                    devices).
                                      (II) Subsection (b)(1) (relating to a
                                    declaration of an emergency).
                                      (III) Subsection (e) (relating to
                                    conditions on authorization).
                      (B) Contents of reports.--The Secretary shall
                    annually submit to the Congress a report that
                    summarizes--
                              (i) the particular actions that were taken
                            under the authorities specified in subparagraph
                            (A), including, as applicable, the
                            identification of the threat agent, emergency,
                            or the biomedical countermeasure with respect
                            to which the authority was used;
                              (ii) the reasons underlying the decision to
                            use such authorities, including, as applicable,
                            the options that were considered and rejected
                            with respect to the use of such authorities;
                            and
                              (iii) the identification of each person or
                            entity that received, or was considered and
                            rejected for, grants, cooperative agreements,
                            or contracts pursuant to the use of such
                            authorities.
              (2) Annual summaries regarding certain activity.--The
            Secretary shall annually submit to the Congress a report that
            summarizes the activity undertaken pursuant to the following
            authorities under section 319F-1 of the Public Health Service
            Act (as added by section 2 of this Act):
                      (A) Subsection (b)(3) (relating to increased
                    micropurchase threshold).
                      (B) Subsection (d) (relating to authority for
                    personal services contracts).
                      (C) Subsection (e) (relating to streamlined personnel
                    authority).
            With respect to subparagraph (B), the report shall include a
            provision specifying, for the one-year period for which the
            report is submitted, the number of persons who were paid
            amounts greater than $100,000 and the number of persons who
            were paid amounts between $50,000 and $100,000.
      (b) National Academy of Sciences Review.--Not later than three years
    after the date of the enactment of this Act, the Secretary of Health
    and Human Services shall request the National Academy of Sciences to
    enter into an agreement for a review of the biomedical countermeasure
    research and development authorities established in this Act to
    determine whether and to what extent activities undertaken pursuant to
    such authorities have enhanced the development of biomedical
    countermeasures affecting national security, and to recommend any
    legislative or administrative changes necessary to improve the ability
    of the Secretary to carry out these activities in the future. The
    Secretary shall ensure that the results of the study are submitted to
    the Congress not later than five years after such date of enactment.
      (c) General Accounting Office Review.--Four years after the date of
    the enactment of this Act, the Comptroller General of the United States
    shall initiate a study--
              (1)(A) to review the Secretary of Health and Human Services'
            utilization of the authorities granted under this Act with
            respect to simplified acquisition procedures, use of
            noncompetitive procedures, increased micropurchase thresholds,
            personal services contracts, streamlined personnel authority,
            and the purchase of security countermeasures under the special
            reserve fund; and
              (B) to recommend any legislative or administrative changes
            necessary to improve the utilization or effectiveness of such
            authorities in the future;
              (2)(A) to review the internal controls instituted by such
            Secretary with respect to such authorities, where required by
            this Act; and
              (B) to recommend any legislative or administrative changes
            necessary to improve the effectiveness of such controls; and
              (3)(A) to review such Secretary's utilization of the
            authority granted under this Act to authorize an emergency use
            of a biomedical countermeasure, including the means by which
            the Secretary determines whether and under what conditions any
            such authorizations should be granted and the benefits and
            adverse impacts, if any, resulting from the use of such
            authority; and
              (B) to recommend any legislative or administrative changes
            necessary to improve the utilization or effectiveness of such
            authority and to enhance protection of the public health.
    The results of the study shall be submitted to the Congress not later
    than five years after the date of the enactment of this Act.

                         Committee Statement and Views

                                    PURPOSE

        The purpose of H.R. 2122, the ``Project Bioshield Act of
    2003,'' is to accelerate the research, development, purchase,
    and availability of countermeasures to combat bioterrorist
    threats that could cause public health emergencies affecting
    national security. While recent decades have yielded rapid
    progress in the treatment of many serious naturally occurring
    diseases, there has been little improvement in the medical
    treatments available to combat potential bioterrioist threats.
    Many countermeasures for potential agents of terrorism,
    including smallpox, anthrax, botulinum toxin, ebola and the
    plague, realistically have no market other than the government
    and, thus, have not generated significant manufacturer
    interest. However, should the United States be attacked with
    these deadly pathogens, the need for vaccines and antitoxins
    would be great and immediate.

                      BACKGROUND AND NEED FOR LEGISLATION

        The anthrax attacks that occurred in October 2001
    highlighted the nation's vulnerability to bioterrorism. Letters
    laced with anthrax caused the deaths of five individuals and
    thousands more received treatment. The death toll could have
    been higher if there had not been effective countermeasures to
    treat that particular form of anthrax. However, no such
    countermeasures currently exist for many of the biological
    threats that are considered the most dangerous by the Centers
    for Disease Control and Prevention. For example, botulinum
    toxin, plague, tularemia, and many viral hermorrhagic fevers
    lack licensed vaccines.\1\
    ---------------------------------------------------------------------------
        \1\ NIAID Biodefense Research Agenda for CDC Category A Agents,
    Responding through Research, National Institute of Allergy and
    Infectious Diseases, National Institutes of Health, Department of
    Health and Human Services (February 2002).
    ---------------------------------------------------------------------------
        The scarcity of countermeasures to combat bioterrorism can
    be attributed to the lack of a significant commercial
    market.\2\ Because these diseases occur infrequently, there has
    been little economic incentive for pharmaceutical and biotech
    companies to make the significant investment required to bring
    new treatments to market. To promote the development of new
    countermeasures to combat bioterrorism, President Bush proposed
    Project Bioshield in his 2003 State of the Union address. H.R.
    2122 is modeled after this proposal and would provide expedited
    procedures for bioterrorism-related procurement and research
    and development.
    ---------------------------------------------------------------------------
        \2\ Project Bioshield: Contracting for the Health and Security of
    the American Public: Committee on Government Reform, 108th Congress
    (April 4, 2003) (Statement of Dr. Mark B. McClellan, Commissioner, Food
    and Drug Administration and Dr. Anthony S. Fauci, Director, National
    Institute of Allergy and Infectious Diseases, National Institutes of
    Health).
    ---------------------------------------------------------------------------
        The bill has three main provisions. First, it would provide
    the Secretary of the Department of Health and Human Services
    (HHS) with streamlined authorities to promote the research and
    development of drugs and other products needed to protect
    Americans in the event of a bioterrorist attack. As a result,
    should the Secretary determine that there is pressing need to
    develop these products, the Secretary would be able to use
    simplified acquisition tools for research and development
    projects and would have expedited authorities to award research
    grants and to hire technical experts and consultants.
        Second, the bill authorizes the procurement of biomedical
    countermeasures for the nation's stockpile using a special
    reserve fund. The bill authorizes $5.93 billion for fiscal
    years 2004 to 2013 for this fund. The Secretary of HHS and the
    Secretary of the Department of Homeland Security would be
    required to work together to recommend to the President the
    countermeasures that are needed for the stockpile. Procurements
    of countermeasures using the special reserve fund could only be
    made with the approval of the President. If the Secretary of
    HHS determines there is a pressing need to acquire certain
    products, the Secretary could use simplified acquisition
    procedures for the procurement of biomedical countermeasures.
        Nothing in these provisions would limit the use of existing
    authorities of the Secretary of HHS and the Secretary of the
    Department of Homeland Security to enter into an agreement that
    provides for research and development as well as production of
    a countermeasure or vaccine under a single procurement, where
    such a single agreement (including a contract, grant,
    cooperative agreement, or other acquisition instrument) for
    research, development, and production of a countermeasure or
    vaccine is deemed appropriate by the proper official. This
    would include instances when a separate funding source is
    authorized and used for the research and development and that
    funding is different than the funding source authorized and
    used for production. The Committee recognizes that such
    agreements providing express linkage between research,
    development, and production are likely to encourage entities to
    enter the government market for countermeasures and vaccines in
    accordance with the authorities provided by the ``Project
    Bioshield Act'' and urges their use where appropriate.
        The Committee notes that the authorities that can be used
    by the Secretary of HHS in title XIV, Section 1451 of H.R. 1588
    and provided to the Secretary of the Department of Homeland
    Security in title VIII, Section 831 of the Homeland Security
    Act of 2002 are applicable to research and development
    (including the development of a prototype) conducted under this
    Act.\3\
    ---------------------------------------------------------------------------
        \3\ The Homeland Security Act of 2002, Public Law 107-296; 116
    Stat. 2224.
    ---------------------------------------------------------------------------
        The third provision of the bill provides that in the event
    of a national emergence, the government would be authorized to
    make available new and promising treatments prior to approval
    by the Food and Drug Administration (FDA). The government may
    exercise this authority if the product is in the approval
    process and is urgently needed because no adequate alternatives
    exist. There also must be a reasonable basis to conclude that
    the countermeasure will be effective and that the benefits of
    the product outweigh the risks. Although this provision would
    permit the avoidance of the FDA approval process, its use
    should be limited to dire circumstances.
        The Committee is aware of the growing problem of naturally
    occurring infections becoming increasingly resistant to
    existing antimicrobial drug products. Antimicrobial resistance
    is the phenomenon whereby infectious microbes mutate and become
    less susceptible to treatment with currently approved drugs.\4\
    In the hands of bioterrorists, these organisms can be used to
    affect national security and accordingly should be considered a
    material threat under Project Bioshield. For example, published
    documents describe how the Russians produced antibiotic-
    resistant anthrax.\5\ However, the Committee understands that
    there has been limited progress in the development of
    countermeasures to combat the emergence of antimicrobial-
    resistant organisms.\6\ One reason may be that the market for
    the few cases of multi-drug resistant bacteria is currently
    quite small. Success in developing appropriate countermeasures
    to treat emerging antibiotic resistant organisms could thwart
    attempts to use these organisms for bioterrorism. Inclusion of
    organisms with emerging antibiotic resistance within the list
    of biological threats contemplated by Project Bioshield should
    permit acceleration of research for and government procurement
    of new drugs and vaccines to treat or prevent infections caused
    by these agents.
    ---------------------------------------------------------------------------
        \4\ Project Bioshield: Contracting for the Health and Security of
    the American Public: Committee on Government Reform, 108th Congress
    (April 4, 2003) (Statement of Dr. John E. Edwards on behalf of the
    Infectious Diseases Society of America).
        \5\ AV Stepanov, LI Marinin, AP Pomerantsev, NA Staritsin,
    Development of Novel Vaccines Against Anthrax in Man, J Biotechnol,
    Jan. 26, 1996.
        \6\ Microbial Threats to Health Emergence, Detection, and Response,
    Committee on Emerging Microbial Threats to Health in the 21st Century,
    Board on Global Health, (Mark S. Smolinski et al. eds., The National
    Academies Press forthcoming 2003). According to this publication, in
    the past three decades, only two new classes of antibiotics have been
    developed, and resistance to one class emerged even before the drugs
    entered the commercial marketplace. Only four large pharmaceutical
    companies with antibiotic research programs remained in existence in
    2002 and not one new class of antibiotics is in advanced development.
    ---------------------------------------------------------------------------

                        COMMITTEE HEARINGS AND TESTIMONY

        The Committee on Government Reform held a hearing to
    consider the ``Project Bioshield Act'' on April 4, 2003. The
    committee heard testimony from the following witnesses: Dr.
    Anthony Fauci, Director, National Institute of Allergy and
    Infectious Diseases, National Institutes of Health; Dr. Mark
    McClellan. Commissioner, Food and Drug Administration; Michael
    Brown, Under Secretary for Emergency Preparedness and Response,
    Department of Homeland Security; Dr. Dale Klein, Assistant to
    the Secretary of Defense for Nuclear, Chemical and Biological
    Defense Programs, Department of Defense. The Committee also
    heard from experts representing the pharmaceutical and biotech
    industries. These witnesses included Frank Rapoport, attorney
    at law, representing Aventis Pasteur; Dr. Michael Friedman,
    Chief Medical Officer for Biomedical Preparedness,
    Pharmaceutical Research and Manufacturers of America; Dr. Una
    Ryan, President, AVANT Immunotherapeutics, Inc.; Katherine
    Bowdish, Ph.D., President, Alexion Antibody Technologies; and
    Dr. John Edwards, Chief of Infectious Diseases, Harbor-UCLA
    Medical Center, on behalf of the Infectious Diseases Society of
    America.
        The witnesses were supportive of the bill. They generally
    agreed with the need to create incentives for manufacturers to
    develop biomedical countermeasures through the creation of a
    government market. The witnesses from the pharmaceutical and
    biotech industries offered suggestions to amend the bill.
    Specifically, Mr. Rapoport suggested including language to
    clarify that the government is authorized to enter into single
    procurement contracts for research, development and production.
    He also suggested including additional contracting flexibility
    through ``other transaction'' authority for research and
    development contracts similar to the authority that is used by
    the Department of Defense. Witnesses also discussed the need
    for the bill to include liability protection for manufacturers
    to further encourage companies to develop countermeasures. Dr.
    Edwards testified about the need for the bill to cover the
    development of countermeasures to combat naturally occurring
    diseases that have become resistant to antimicrobial products.

                          Section-by-Section Analysis

    Section 1. Short title

        The short title of the bill is the ``Project Bioshield Act
    of 2003.''

    Section 2. Biomedical countermeasure research and development
            authorities

        This section would amend the Public Health Service Act to
    grant the Secretary of Health and Human Services (HHS)
    additional flexibility and authority to conduct research and
    development of drugs, vaccines and other products to combat
    biological, chemical, nuclear, and radiological agents that may
    affect national security.

                Expedited procurement authority

        This section provides the Secretary of HHS with enhanced
    procurement authorities to perform, administer, or support
    biomedical countermeasure research and development. The
    simplified acquisition threshold would be increased from
    $100,000 to $25 million for the purchase of property or
    services the Secretary determines are needed to perform
    pressing biomedical countermeasure research and development.
    The simplified acquisition procedures have been in law since
    the mid-1990s and are designed to promote efficiency and
    economy in contracting and to avoid unnecessary burdens for
    agencies and contractors. Procurements by the Secretary of HHS
    of products or services under the simplified acquisition
    threshold would be subject to contract work hours and safety
    standards, anti-kickback rules, and provisions authorizing the
    examination of contractor records. Additionally, the Secretary
    would be required to institute internal controls for
    procurements made under this authority, including documenting
    the justification for use of the simplified procedures.
        After making the required determination of pressing need,
    the Secretary of HHS would also be authorized to use other than
    competitive procedures for procurements of biomedical
    countermeasures when there are only a limited number of
    responsible sources and no other type of property or services
    will satisfy the Secretary's needs. For the purposes of using
    other than competitive procedures in this section, the phrase
    in section 303(c)(1) of title III of the Federal Property and
    Administrative Services Act of 1949, ``available from only one
    responsible source'' shall be deemed to mean ``available from
    only one responsible source or only from a limited number of
    responsible sources.'' The other than competitive procedures
    authorized under this section are to be implemented in
    accordance with the justification and approval provisions of 41
    U.S.C. 253(f) and the notice provisions of 41 U.S.C. 416. This
    expanded authority would be in addition to any other authority
    to use procedures other than competitive procedures.
        This section also increases the micropurchase threshold
    from $2,500 to $15,000 for the procurement of property or
    services that are determined to be necessary for pressing
    countermeasure research and development. The Secretary would be
    required to institute internal controls for purchases greater
    than $2,500.

                Authority to expedite peer review

        The Secretary would be authorized to expedite the award
    process for grants, contracts, and cooperative agreements for
    biomedical countermeasure research and development if the
    Secretary deems there is a pressing need for the expedited
    award. This authority would be limited to awards of not more
    than $1.5 million and would give the Secretary greater
    flexibility to determine which research projects would be
    funded. Peer review is designed to maximize the chances that
    only proposals with the greatest scientific merit receive
    funding. The normal peer review process to consider grant
    proposals may take up to one year.

                Authority for personal services contracts and streamlined
                        personnel authority

        This section would also give the Secretary streamlined and
    flexible personnel authorities for the purpose of performing,
    administering, and supporting qualified countermeasure research
    and development. Under these authorities, the Secretary could
    hire experts or consultants, without regard to limitations on
    service or pay. The Secretary could also appoint professional
    or technical employees to perform pressing countermeasure
    research and development without regard to provisions in Title
    5 of the U.S. Code governing classification, pay rates, and
    appointments in the competitive service.
        The authorities in this section would be committed to
    agency discretion. However, interested parties would have the
    authority to protest contracting decisions to the contracting
    agency, the General Accounting Office or the Federal Court of
    Claims.

    Section 3. Biomedical countermeasures procurement

                Procurement of certain biomedical countermeasures and
                        availability of special reserve fund

        Section 3 addresses the procurement of biomedical
    countermeasures for inclusion in the National stockpile. The
    section would require the government to follow certain
    procedures to determine whether to buy biomedical
    countermeasures from a special reserve fund created by the Act.
    The Secretary of the Department of Homeland Security (DHS)
    would be required to assess threats to the U.S. population that
    are posed by the use of chemical, biological, radiological, and
    nuclear agents. The Secretary of HHS would be required to
    assess the public health consequences of the use of such agents
    and the availability and appropriateness of countermeasures to
    combat the threats. After performing this analysis, both the
    Secretary of HHS and DHS could jointly recommend that the
    President procure countermeasures for the Nation's stockpile,
    using the special reserve fund. Nothing in the Act would
    restrict or alter existing authority to purchase items for the
    stockpile using existing discretionary appropriations for such
    purpose.
        If the President approves the recommendation to procure a
    countermeasure from the special reserve fund, the Secretaries
    would enter into an agreement under which the Secretary of HHS
    would procure the countermeasure for the stockpile using the
    special reserve fund maintained by the Department of Homeland
    Security. The Secretaries would be required to notify Congress
    of decisions to procure a countermeasure.
        Under the Act, contractors could generally not be paid
    until a substantial portion of the countermeasure is delivered.
    However, the Secretary of HHS could make an advance payment of
    up to 10 percent, if necessary, to ensure success of a project.
    Contracts for biomedical countermeasures could last for five
    years, but could be extended for up to eight years, if the
    Secretary of HHS determines that a longer period is justified
    because of complexities or other performance difficulties. The
    contract can be renewed for additional periods not to exceed
    five years. This section also contains a number of provisions
    concerning contractor storage of stockpile items, payment of
    premiums where there are multiple contractors, extension of
    closing dates for receipt of proposals, and the exclusion of
    sources for failure to respond to a request for information.
        The Secretary of HHS would have enhanced procurement
    authorities for the purchase of biomedical countermeasures if
    the Secretary determines that there is a pressing need. The
    Secretary could use simplified acquisition procedures to
    procure any biomedical countermeasure. Contractor work hours
    and safety standards, anti-kickback rules, and provisions
    authorizing examination of contractor records would apply to
    the contracts. Additionally, after a determination of pressing
    need, the Secretary of HHS could use other than competitive
    procedures if the product is available from only one
    responsible source or from a limited number of responsible
    sources and no other type of product will satisfy the
    Secretary's needs.
        The Secretary of HHS would be authorized to use other than
    competitive procedures for procurements of biomedical
    countermeasures when there are only a limited number of
    responsible sources and no other type of property or services
    will satisfy the Secretary's needs. For the purposes of using
    other than competitive procedures in this section, the phrase
    in section 303(c)(1) of title III of the Federal Property and
    Administrative Services Act of 1949, ``available from only one
    responsible source'' shall be deemed to mean ``available from
    only one responsible source or only from a limited number of
    responsible sources.'' The other than competitive procedures
    authorized under this section are to be implemented in
    accordance with the justification and approval provisions of 41
    U.S.C. 253(f) and the notice provisions of 41 U.S.C. 416. This
    expanded authority would be in addition to any other authority
    to use procedures other than competitive procedures.

                Authorization of appropriations

        For procurements of biomedical countermeasures from the
    special reserve fund, the bill authorizes $890 million in FY
    2004 and $3.4 billion and $5.6 billion over the next five and
    ten fiscal years respectively. All amounts appropriated under
    this authorization would be available for obligation through
    the end of FY 2013.

    Section 4. Authorization for medical produces for use in emergencies

        Section 4 of the Act amends the Food, Drug, and Cosmetic
    Act by permitting the Secretary of HHS to authorize the
    emergency use of drugs, devices, or biological products prior
    to approval, clearance or license by the FDA. The emergency use
    of unapproved products could only be performed during times of
    military, national, or public health emergencies. To exercise
    this authority the Secretary of HHS must conclude that:
              (1) A biological, chemical, radiological or nuclear
            agent can cause a serious or life-threatening disease;
              (2) Based on scientific evidence, the product may be
            effective in detecting, diagnosing, treating, or
            preventing the disease;
              (3) The known and potential benefits of the product
            outweigh the known or potential risks;
              (4) There is no adequate alternative to the product
            that is already approved and available; and
              (5) Any other criteria specified by the Secretary of
            HHS.
        A declaration of an emergency can last for a maximum of one
    year unless the Secretary of HHS renews it. If the Secretary
    authorizes the use of an unapproved product, the Secretary
    shall place certain conditions on such authorization (including
    conditions intended to provide information to both health care
    professionals administering the product and the recipients of
    the product) and may place other conditions on the
    authorization at the Secretary's discretion.
        The Secretary of HHS may authorize a new, emergency dual
    use for existing FDA approved products to treat alternate
    diseases. Manufacturers that wish to avail themselves of such
    an emergency use authorization may be subjected to certain
    conditions.
        Nothing in Section 4 requires any manufacturer,
    distributor, physician, pharmacist, or other person to make a
    product available under the emergency use authorization.
    However, if a person chooses to provide an emergency use
    product, he or she must follow conditions imposed by the
    Secretary of HHS. Persons failing to comply with applicable
    conditions under this provision will be treated as if they are
    providing an unapproved drug or device and could be subject to
    enforcement actions.

    Section 5. Reports regarding authorities under this Act

        The Secretary of HHS must submit an annual report to
    Congress detailing and summarizing the Secretary's exercise of
    the new authorities authorized in the previous sections of the
    bill. Studies by the National Academy of Sciences and the
    General Accounting Office concerning implementation of this Act
    would be required as well.

                           Explanation of Amendments

        The provisions of the substitute are explained in this
    report.

                            Committee Consideration

        H.R. 2122 was introduced by Representative W.J. (Billy)
    Tauzin (LA) on May 15, 2003, and was cosponsored by Rep. John
    Dingell (MI), Rep. Tom Davis (VA), Rep. Christopher Cox (CA),
    Rep. Ed Markey (MA), Rep. Mike Bilirakis (FL), Rep. Jim Davis
    (FL), Rep. Fred Upton (MI), Rep. Cliff Stearns (FL), Rep. John
    Shadegg (AZ), Rep. Darrell Issa (CA), Rep. Lincoln Diaz-Balart
    (FL), and Rep. Anna Eshoo (CA). The bill was referred to the
    Committee on Energy and Commerce, the Committee on Government
    Reform, and the Select Committee on Homeland Security.
        On May 22, 2003, the Committee on Government Reform met in
    open session to consider H.R. 2122 along with seven other
    bills. The committee favorably approved the bill as amended by
    voice vote and reported it to the House of Representatives. The
    Energy and Commerce Committee approved H.R. 2122 by a voice
    vote on May 15, 2003.
        At the full committee business meeting, an amendment in the
    nature of substitute offered by Government Reform Committee
    Chairman Tom Davis (VA) was approved by a voice vote. The
    amendment makes three changes to the bill. First, the amendment
    applies the ``pressing need'' standard used for research and
    development procurement in section 2, to biomedical
    countermeasure procurements in section 3. Second, section 2 of
    the bill would commit decisions about research and development
    projects to the HHS Secretary's discretion. The amendment would
    permit interested parties to protest research and development
    contracting decisions to the contracting agency, the
    Comptroller General, or the United States Court of Federal
    Claims. The amendment also makes technical changes in sections
    2 and 3 to clarify the circumstances when the Secretary of HHS
    could use other than competitive procedures for research and
    development and production contracts.

                  Application of Law to the Legislative Branch

        Section 102(b)(3) of Public Law 104-1 requires a
    description of the application of this bill to the legislative
    branch. This bill accelerates the research, development,
    purchase, and availability of countermeasures to combat
    bioterrorist threats that could cause public health emergencies
    affecting national security. The benefits of this bill apply
    equally to employees of the legislative branch.

      Statement of Oversight Findings and Recommendations of the Committee

        In compliance with clause 3(c)(2) of rule XIII and clause
    (2)(b)(1) of rule X of the Rules of the House of
    Representatives, the Committee's oversight findings and
    recommendations are reflected in the descriptive portions of
    this report.

             Statement of General Performance Goals and Objectives

        In accordance with clause 3(c)(4) of rule XIII of the Rules
    of the House of Representatives, the Committee's performance
    goals and objectives are reflected in the descriptive portions
    of the report.

                       Constitutional Authority Statement

        Under clause 3(d)(1) of rule XIII of the Rules of the House
    of Representatives, the Committee must include a statement
    citing the specific powers granted to Congress to enact the law
    proposed by H.R. 2122. The constitutional authority to enact
    this law lies within the General Welfare and Necessary and
    Proper clauses of Article I, Section Eight of the United States
    Constitution.

                           Unfunded Mandate Statement

        Section 423 of the Congressional Budget and Impoundment
    Control Act (as amended by Section 101(a)(2) of the Unfunded
    Mandate Reform Act, P.L. 104-4) requires a statement whether
    the provisions of the reported include unfunded mandates. In
    compliance with this requirement the Committee has received a
    letter from the Congressional Budget Office included herein.

                               Committee Estimate

        Clause 3(d)(2) of rule XIII of the Rules of the House of
    Representatives requires an estimate and a comparison by the
    Committee of the costs that would be incurred in carrying out
    H.R. 2122. However, clause 3(d)(3)(B) of that rule provides
    that this requirement does not apply when the Committee has
    included in its report a timely submitted cost estimate of the
    bill prepared by the Director of the Congressional Budget
    Office under section 402 of the Congressional Budget Act.

         Budget Authority and Congressional Budget Office Cost Estimate

        With respect to the requirements of clause 3(c)(2) of rule
    XIII of the Rules of the House of Representatives and section
    308(a) of the Congressional Budget Act of 1974 and with respect
    to requirement of clause (3)(c)(3) rule XIII of the Rules of
    the House of Representatives and section 402 of the
    Congressional Budget Act of 1974, the Committee has received
    the following cost estimate for H.R. 2122 from the Director of
    Congressional Budget Office.

                                         U.S. Congress,
                                   Congressional Budget Office,
                                          Washington, DC, June 6, 2003.
    Hon. Tom Davis,
    Chairman, Committee on Government Reform,
    House of Representatives, Washington, DC.
        Dear Mr. Chairman: The Congressional Budget Office has
    prepared the enclosed cost estimate for H.R. 2122, the Project
    BioShield Act of 2003.
        If you wish further details on this estimate, we will be
    pleased to provide them. The CBO staff contacts are Jeanne De
    Sa and Sam Papenfuss.
                Sincerely,
                                           Douglas Holtz-Eakin,
                                                              Director.
        Enclosure.

    H.R. 2122--Project BioShield Act of 2003

        Summary: H.R. 2122 would amend the Public Health Service
    Act (PHSA) to authorize appropriations of up to $5.6 billion
    for fiscal years 2004 through 2013 for procurement of certain
    security countermeasures (drugs, devices, and biological
    products to treat, identify, and prevent the public health
    consequences of terrorism). Of that amount, $890 million could
    be obligated in fiscal year 2004 and up to $3.4 billion could
    be obligated during fiscal years 2004 though 2008. Funding to
    buy these security countermeasures would be provided to the
    Department of Homeland Security (DHS), but the Department of
    Health and Human Services (HHS) would be responsible for
    procuring and stockpiling the countermeasures.
        Assming appropriation of authorized amount and including
    administrative costs, CBO estimates that implementing H.R. 2122
    would increase discretionary spending by $0.3 billion in 2004,
    $3.1 billion for fiscal years 2004 through 2008, and $5.6
    billion over the 2004-2013 period. In addition, H.R. 2122 would
    relax certain requirements for federal agencies related to the
    development and approval of countermeasures. The bill would
    provide HHS with increased authority and flexibility to award
    contracts and grants for research and development of qualified
    countermeasures, hire technical experts, and procure items
    necessary for research. Those provisions might result in higher
    discretionary spending, but CBO does not have sufficient
    information to estimate their budgetary effect.
        The bill also would authorize the Food and Drug
    Administration (FDA) to approve the use of certain security
    countermeasures during emergencies designated by the Secretary
    of HHS. CBO estimates this provision would have no budgetary
    effect.
        H.R. 2122 contains no intergovernmental or private-sector
    mandates as defined in the Unfunded Mandates Reform Act (UMRA)
    and would impose no costs on state, local, or tribal
    governments.
        Estimated cost to the Federal Government: The estimated
    budgetary impact of H.R. 2122 is shown in the following table.
    The costs of this legislation fall within budget function 550
    (health). CBO assumes that H.R. 2122 would be enacted by
    October 1, 2003.

    ----------------------------------------------------------------------------------------------------------------
                                                         By fiscal year, in millions of dollars--
                                     -------------------------------------------------------------------------------
                                       2004    2005    2006    2007    2008    2009    2010    2011    2012    2013
    ----------------------------------------------------------------------------------------------------------------
                                            CHANGES IN DISCRETIONARY SPENDING

    Project BioShield:
        Estimated authorization          890   2,528       0       0       0   2,175       0       0       0       0
         level......................
        Estimated outlays...........     270     680     870     770     510     440     560     650     490     250
    Administrative costs:
        Estimated authorization            9       9       9       9      10      10      10      10      11      11
         level......................
        Estimated outlays...........       7       8       9       9      10      10      10      10      11      11
    ----------------------------------------------------------------------------------------------------------------

    Basis of estimate

        CBO assumes that this bill will be enacted during fiscal
    year 2003 and will take effect in October 2003.
                Procurement of security countermeasures: Project BioShield
        Under current law, HHS administers the Strategic National
    Stockpile (SNS), which contains drugs diagnostic devices,
    vaccines, and other biological products to combat the public
    health consequences of a terrorist attack or other public
    health emergencies. DHS currently provides the financing for
    those efforts, which include the procurement of a new smallpox
    vaccine and stockpiling of that vaccine and older versions of
    the vaccine. Authorization for those programs was established
    in the Public Health Security and Bioterrorism Preparedness
    Response Act of 2002 (Public Law 107-88). That act authorized
    appropriations of $640 million in 2002 and such sums as may be
    necessary for fiscal years 2003 through 2006 for the SNS and
    $509 million in 2002 and such sums as may be necessary for
    fiscal years 2003 through 2006 for the development of the
    smallpox vaccine. About $400 million was appropriated in 2003
    for those activities.
        H.R. 2122 would modify the existing authorizations for the
    SNS and for the development of the smallpox vaccine by
    codifying the provision in the PHSA instead of in Public Law
    107-88. CBO estimates that this modification would have no
    budgetary effect.
        H.R. 2112 also would authorize DHS to augment the SNS with
    certain additional products. That effort, called Project
    BioShield, would allow the federal government to enter into
    contracts to procure security countermeasures, which are
    defined in the bill as drugs, devices, biological products,
    vaccines, vaccine adjuvants, antivirals, or diagnostic tests
    used to treat, identify, or prevent harm from an agent that the
    Secretary determines may cause a public health emergency
    affecting national security. Such drugs, devices, or biological
    products would have to be licensed or approved by the FDA, or
    otherwise determined by the Secretary of HHS to have the
    potential to be licensed or approved by the FDA. The federal
    government also could acquire products used to treat the
    adverse effects of drugs or biologic products used as security
    countermeasures.
        The rate at which the funding authorized by the bill would
    be appropriated and spent would depend upon many factors,
    including the nature of advances in biotechnology, the degree
    of industry interest and capacity, the threat environment, and
    government priorities. Assuming appropriation of the authorized
    amounts, current and future Administrations would have the
    discretion to enter into multiple contracts for the manufacture
    of security countermeasures or to cease contracting altogether
    for a period of years.
        To estimate spending under H.R. 2122, CBO consulted with
    Administration officials about activities they are planning or
    would consider if Project BioShield were enacted. Officials
    described plans to acquire and maintain stockpiles of seven
    security countermeasures to combat five biological agents. The
    Administration estimates that the cost of procuring, storing,
    and replacing those countermeasures would be about $5.6 billion
    over the 2004-2013 period if there were no constraints on
    funding.
        Those currently planned acquisitions do not include any
    countermeasures for chemical, readiological, or nuclear agents,
    and they address only a subset of the threats for which
    research and development activities on countermeasures is being
    conducted or funded by HHS, the Department of Defense (DoD),
    and the private sector. Based on information provided by
    government officials and in consultation with outside experts,
    CBO has concluded that it is likely that drugs, devices, or
    biological products addressing some of those other threats will
    be developed in the coming decade and that some of those
    countermeasures would be stockpiled under Project Bioshield if
    funds were appropriated for that purpose. CBO's estimate does
    not assume that any specific product would be developed and
    procured at any specific time. It does, however, account for a
    range of possibilities that would be available to the
    government if the authorized funds are appropriated.
        Authorities and Requirements Under H.R. 2122. H.R. 2122
    would authorize appropriations of up to $5.6 billion for fiscal
    years 2004 through 2013 for the federal government to enter
    into contracts to procure security countermeasures. Of that
    amount, $890 million could be obligated in fiscal year 2004 and
    up to $3.4 billion could be obligated during fiscal years 2004
    through 2008.
        Decisions regarding what types of security countermeasures
    to procure would be made by the President after reviewing
    recommendations of the Secretaries of DHS and HHS. Subject to
    Presidential approval and a determination that inclusion of
    certain countermeasures in the stockpile is appropriate, the
    Secretaries of DHS and HHS would seek potential vendors to
    produce the countermeasures and enter into contracts to buy the
    countermeasures from these vendors. In making that
    determination, the Secretary would determine and consider
    several factors, including the quantity of the product
    necessary for the stockpile, the feasibility of obtaining
    sufficient quantities of the product within five years, and
    whether there is a significant commercial market for the
    product other than as a security countermeasure. Those factors
    would not be requirements for procurement, but considerations
    in determining the appropriateness for inclusion of the
    countermeasure in the stockpile.
        The Secretary of HHS would be responsible for arranging the
    procurement, including negotiating the quantity, price, and
    production schedule in five-year contracts or cooperative
    agreements, though eight-year contracts would be permitted for
    first awards. Payment would be conditioned on the delivery of a
    substantial portion of promised units. However, the Secretary
    could provide an advance payment of not to exceed 10 percent of
    the contract if the Secretary determines such payment is
    necessary to the project's success. The Secretary could pay
    vendors for storage, shipping, and handling and would be
    permitted to use noncompetitive procedures if the product is
    available only from a limited number of sources. Additional
    countermeasures for the same threat also could be procured, if
    they were to provide improved safety or effectiveness or
    otherwise enhance public health preparedness.
        The authorized funds could not be used for the purchase of
    vaccines under contracts entered into prior to enactment, or
    for administrative costs. Based on information from
    Administration officials, CBO expects that funding would not be
    available specifically for research and development, although
    the price for the completed products would probably cover some
    development costs.
        The Administration's Plans To Implement Project BioShield.
    Based on existing science and a current assessment of potential
    threats to public health, the Administration has identified
    several agents for which countermeasures are needed to protect
    the public health and could be included in Project BioShield.
    Those agents are smallpox, anthrax, botulinum toxin, plague,
    and Ebola. The Administration estimates that spending for
    countermeasures under Project BioShield, including purchase,
    storage, and replacement costs, would total about $5.6 billion
    over the 2004-2013 period, assuming the successful development
    of those countermeasures and no constraints on funding. More
    than half of those costs would be for the improved smallpox and
    anthrax vaccines. A brief description follows of the security
    countermeasures the Administration plans to acquire and
    stockpile.
        Smallpox. Under Project BioShield, the Administration plans
    to procure a next-generation version of the smallpox vaccine
    called modified vaccinia Ankara (MVA). This new vaccine is an
    attenuated version of the existing vaccine and may be used to
    safely vaccinate about 30 million individuals with compromised
    immune systems, eczema, or certain other high-risk conditions.
    Under the authority provided for Project BioShield, HHS plans
    to purchase 60 million doses of the new vaccine at about $15
    per dose over a three-year period for a cost of about $900
    million. The Administration expects to be able to enter into
    contracts and begin acquiring the vaccine in 2004. Additional
    costs for inventory management and replacement of expired
    stocks over the 2007-2013 period would likely add another $1
    billion, according to Administration estimates, but could be
    lower if long-term refrigerated storage proves to be effective.
        Anthrax. The Administration also expects to purchase about
    60 million doses of a next-generation anthrax vaccine, called a
    recombinant protective antigen (rPA) vaccine, under Project
    BioShield. The rPA vaccine require fewer doses per person than
    the current vaccine, and potentially could be effective for
    people who have already been exposed to anthrax, giving the
    government the ability to vaccinate about 20 million people.
    The Administration anticipates beginning the procurement
    process in the next few years and spending about $700 million
    on the vaccine over a three-year period. Because the rPA
    anthrax vaccine has an expected shelf life of five to six
    years, additional costs would be incurred for inventory
    management and replacement. The Administration estimates that
    costs for the rPA vaccine could total $1.4 billion over the
    2004-2013 period.
        Botulinum Toxin. Under current law, HHS has stockpiled some
    antitoxins to treat botulism, a paralytic and often fatal
    illness caused by a nerve toxin produced by the botulinum
    bacteria. However, those antitoxins are no longer manufactured,
    and the manufacturing process, which requires horse serum, is
    complicated and time intensive. After identifying a
    manufacturer, the Administration plans to spend about $800
    million acquiring newly produced antitoxin at a cost of about
    $2,000 per dose as part of Project BioShield. Acquisition would
    be spread over a three-year period, beginning in the next few
    years. This antitoxin would require specialized storage and
    refrigeration.
        In addition, the Administration has indicated that it would
    like to purchase both a vaccine that would protect against
    botulism and monoclonal antibodies to neutralize the effects of
    the toxin. (Monoclonal antibodies are engineered proteins that
    can neutralize and destroy certain pathogens and toxins.) The
    Administration anticipates buying vaccine and monoclonal
    antibodies by 2007 or 2008, at a cost of about $140 million for
    750,000 doses of the vaccine and $750 million for monoclonal
    antibodies. The Administration estimates that spending for
    botulinum countermeasures, including the cost of storage and
    inventory management, would total $1.8 billion over the 2004-
    2013 period.
        Plague. Plague is an infectious disease caused by a
    bacterium. Plague has several forms--pneumonic, bubonic, and
    septicemic--and can be treated by existing antibiotics. A
    vaccine for the plague is currently in the research and
    development phase, with the expectation that a product
    potentially could reach the advanced development phase next
    year. Beginning in 2005, the Administration expects to procure
    about 2 million doses (enough to treat people in areas
    surrounding any outbreak) at an estimated cost of about $40 per
    dose--for a total cost of about $80 million. With additional
    costs related to the acquisition of the vaccine, the
    Administration estimates spending on plague countermeasures
    would total about $220 million over the 2004-2013 period.
        Ebola. There is no current treatment for Ebola, one of
    several viral hemorrhagic fevers, but the National Institutes
    of Health (NIH) is conducting research on a vaccine that the
    Administration would be interested in purchasing when it
    reaches an advanced development stage. Under current plans, the
    Administration intends to purchase enough vaccine for 3 million
    individuals to prevent the spread of an outbreak. Because this
    vaccine is still in the research and development phase, when
    the vaccine would become available and the potential cost per
    dose are unclear. The Administration assumes the vaccine will
    become available in 2005, and estimates the price to be about
    $30 per dose, for a total acquisition cost of $90 million.
    Combined with other costs related to the Ebola vaccine,
    including storage and replacement, the Administration
    anticipates spending would total about $260 million over the
    2004-2013 period for this aspect of Project BioShield.
        CBO's Estimate of the Potential Cost of Project BioShield.
    CBO has estimated both the cost of implementing the
    Administration's plan and the potential cost of acquiring other
    products not encompassed by that plan.
        CBO's Estimate of the Administration's Plan. Without any
    funding constraints, CBO expects that the Administration's
    plans for MVA smallpox vaccine, the anthrax rPA vaccine, and
    the botulism antitoxins would likely take shape as described,
    albeit more slowly than the Administration estimates. CBO
    estimates that spending for vaccines and monoclonal antibodies
    for botulism and vaccines for plague and Ebola would likely be
    lower than the Administration estimates, even without funding
    constraints. CBO's lower estimate reflects the possibility that
    development of those vaccines and monoclonal antibodies might
    not succeed as quickly as the Administration's estimate
    assumes. It also reflects the possibility that Project
    BioShield would spend less on some of the botulism
    countermeasures if all three countermeasures (vaccine,
    antitoxins, and monoclonal antibodies) became available.
        CBO estimates that about $5.2 billion would be required to
    procure products identified by the Administration over the
    2004-2013 period.
        Estimated Spending for Products Not Listed in the
    Administration's Plan. Under the bill, other countermeasures
    not in the Administration's plan could be purchased with
    appropriations provided through Project BioShield.
    Consequently, the specific security countermeasures that would
    be acquired under H.R. 2122 are likely to evolve over time as
    the result of many factors, including scientific advances, the
    interest and cooperation of biotech and other manufacturing
    companies, the emergence of new threats, and changes in this
    and future Administrations' assessments of which potential
    countermeasures should be a priority. Barriers to technological
    advance such as restricted laboratory space or shortage of
    primates for testing could slow development of countermeasures
    for certain agents. At the same time, rapid advances in
    products currently in the early-stage research and development
    could present the government with unforeseen countermeasure
    options. Acquisition of countermeasures would also be affected
    by whether this and future Administrations decide to procure
    products that require more than five years to be licensed or
    have a significant commercial market.
        Acquisitions under the bill might include additional
    countermeasures for agents addressed by the Administration's
    plan. For instance, potential emerging treatments include the
    use of monoclonal antibodies. This technology has had initial
    application in the treatment of cancer, and possibly could be
    applied to anthrax, the plague, or viral hemorrhagic fevers in
    the coming years. Other potential countermeasures include new
    antiviral drugs to treat smallpox and viral hemorrhagic fevers
    (both biodefense research priorities for NIH) and a narrow-
    spectrum antibiotic for anthrax.
        In addition, CBO's research indicates there are numerous
    other biological agents for which countermeasures ultimately
    could be purchased under Project BioShield. HHS has established
    three classes of biological agents that pose significant risks
    to national security and the public health. Category A agents
    pose the greatest risk due to their ease of transmission,
    mortality rates, and overall risk to the public. All of the
    agents included in the Administration's plan are considered
    Category A agents, but that initial plan does not address such
    Category A agents as tularemia, a bacterial infection affecting
    the respiratory system, and viral hemorrhagic fevers other than
    Ebola. Vaccines for both of those agents are biodefense
    research priorities of NIH. Further, the government might seek
    countermeasures for some Category B and C agents, including
    toxins such as ricin, certain bacteria such as brucellosis, and
    several forms of viral encephalitis.
        Also, under the authority provided by the bill, the
    government could procure countermeasures against chemical
    agents (nerve, blister, blood, and pulmonary agents) and
    radiological and nuclear agents. The Administration currently
    does not plan to use the bill's authority to purchase agents
    that could mitigate threats from these sources, but it could do
    so if the perceived threat from these agents changed or if
    certain treatments became scientifically feasible.
    Countermeasures that could be acquired under Project BioShield
    include existing treatments for many nerve gases (including VX,
    Sarin, and Soman gas), Prussian Blue (a treatment for certain
    types of radiation poisoning), and hydroxycobalamin (a
    treatment for cyanide poisoning that is in an advanced stage of
    development).
        Finally, under H.R. 2122, Project BioShield would be able
    to purchase devices to detect and diagnose pathogens and other
    agents. Costs for such devices are also not included in the
    Administration's estimate.
        To estimate potential spending for additional
    countermeasures not mentioned in the Administration's plan, CBO
    identified several category A, B, and C biological agents and
    chemical and radiological agents for which countermeasures
    exist or are under development. The set of selected agents and
    countermeasures is not intended as a prediction of which
    countermeasures would be acquired by Project BioShield. Rather,
    it is intended to be representative of the countermeasures that
    would be eligible for acquisition if current research and
    development activities succeed in producing qualified
    countermeasures during the coming decade.
        For each of the representative biological agents, CBO
    determined whether the countermeasure is likely to be a
    vaccine, an antitoxin or antiviral, or a monoclonal antibody,
    the dosage and method of delivery (intravenously or in pill
    form), and the amount necessary to treat the population that
    could potentially be affected. The estimate assumes that
    vaccines would cost $30 to $40 per dose, on average, with
    Project BioShield acquiring 500,000 to 2 million doses of
    qualified vaccines, depending on whether the agent is
    infectious. CBO estimates that monoclonal antibodies would cost
    $5,000 per treatment, and that Project Bioshield would acquire
    enough to treat several hundred thousand people if qualified
    products became available. The estimate assumes that, if other
    types of qualified antivirals or antitoxins became available,
    Project BioShield would acquire enough to treat 500,000 people,
    at costs ranging from $2,000 to $5,000 per person for certain
    intravenously-administered forms. Other countermeasures could
    be less expensive on a per-person basis. For example, certain
    antivirals or narrow-spectrum antibiotics in pill form could
    cost about $100 per treatment, CBO estimates. Additionally, CBO
    estimates that per-person costs would average $50 for Prussian
    Blue, $100 for intravenous treatments for hydrogen cyanide, and
    $300 per treatment for countermeasures for certain radiological
    and nuclear agents. If Project BioShield acquired those types
    of countermeasures, CBO assumes that the quantity procured
    would be sufficient to respond to simultaneous events in
    several large cities.
        Under optimistic assumptions about when countermeasures for
    the representative agents would become available, the cost of
    acquiring, storing, and replacing all qualified countermeasures
    for those agents could total $10 billion to $20 billion during
    the 2004-2013 period. However, CBO assumes that research and
    development efforts for some countermeasures will proceed
    slowly or be unsuccessful, and that the Administration would
    not acquire all products that could be designated as security
    countermeasures.
        Assuming appropriation of the authorized amount, CBO
    estimates that discretionary spending to acquire and store
    BioShield products would total $0.3 billion in 2004 and $5.5
    billion over the 2004-2013 period. Acquisition costs would
    comprise 70 percent to 80 percent of that amount, while
    inventory management and replacement costs would make up the
    balance.
        CBO also estimates that implementing Project BioShield
    would add to the administrative costs of HHS and DHS, both for
    the contracting process and managing the stockpile. Funding for
    those costs would come from appropriated funds. Based on
    current spending for program support services for bioterrorism-
    related activities (including the SNS) at the Centers for
    Disease Control and Prevention, CBO estimates that
    administrative costs would be about $10 million a year. Subject
    to the appropriation of necessary amounts, CBO estimates that
    discretionary spending for such costs would increase by $7
    million in 2004 and $0.1 billion over the 2004-2013 period.

                Research and development into qualified countermeasures

        H.R. 2122 would authorize the Secretary of HHS to expedite
    procurement and peer review for research related to qualified
    countermeasures. The bill also would allow the Secretary to
    secure the services of expects or consultants with relevant
    expertise. Implementation of these measures could increase the
    resources required by the agency, accelerate spending, or both.
    CBO does not have sufficient information to estimate the
    additional resources that might be required by the agency or
    the rate at which spending might accelerate under the bill.
    Such spending could come from appropriated funds.

                Authorization for medical products for use in emergencies

        The FDA's regulatory process allows for expedited approval
    of security countermeasures under current law. Pursuant to the
    Public Health Security and Bioterrorism Preparedness and
    Response Act of 2002, the FDA may allow certain drugs, devices,
    and bioligics defined as priority countermeasures to move more
    quickly through the agency's regulatory process. To further
    expedite the development of security countermeasures, the FDA
    has implemented a rule that allows approval of certain drugs
    based on tests in animals.
        H.R. 2122 would allow the Secretary of HHS to authorize the
    FDA to approve the use of certain drugs or devices for use
    during periods designated as emergencies by the Secretary of
    HHS, DHS, or Defense. The authorization would remain in effect
    for no more than one year, unless the Secretary determines
    otherwise based on the nature of the emergency. When the
    Secretary authorizes the emergency use of a product that is an
    unapproved use of an approved product, the bill would provide
    some flexibility to manufacturers in carrying out activities
    under the emergency use authorization.
        Based on information from Administration officials, CBO
    expects that implementing this provision in H.R. 2122 would not
    increase costs to the FDA. Over the past year, the FDA has
    hired about 100 people to review drug applications and provide
    assistance to companies engaged in research and development
    into security countermeasures. Thus, the agency already has the
    infrastructure to handle the additional authority related to
    the proposed emergency-use authorization and would not require
    additional resources. Therefore, CBO estimates that this
    provision of H.R. 2122 would have no budgetary effect.
        Previous CBO estimates: S. 15, the Project BioShield Act of
    2003, as reported by the Senate Committee on Health, Education,
    Labor and Pensions on March 25, 2003, would amend the Public
    Health Service Act (PHSA) to create permanent, indefinite
    funding authority for the procurement of certain biomedical
    countermeasures. In its cost estimate dated May 7, 2003, CBO
    estimated that enacting S. 15 would increase direct spending by
    $270 million in 2004 and $8.1 billion over the 2004-2013
    period.
        Although both H.R. 2122 and S. 15 would authorize programs
    to procure countermeasures to protect the public health against
    terrorism, H.R. 2122 would not have an effect on direct
    spending; instead, the bill would authorize appropriations of
    up to $5.6 billion over the 2004-2013 period. Estimated
    spending under H.R. 2122 is less than under S. 15 because the
    House bill would authorize a set amount of appropriations,
    whereas the Senate bill would provide unlimited direct spending
    authority.
        In several areas, H.R. 2122 would allow the Secretary more
    flexibility in terms of what products could be procured and how
    contracts would be structured. H.R. 2122 would allow the
    procurement of countermeasures even if they have a significant
    commercial application, while S. 15 would restrict the
    procurement authority to those without such application. While
    S. 15 would require the Secretary to determine that a
    countermeasure is likely to be approved by the FDA within five
    years as a condition of procurement, H.R. 2122 would require
    only that the Secretary consider whether a five-year limit is
    feasible. H.R. 2122 would provide additional flexibility in
    contracting by permitting the Secretary to extend first-time
    contracts to eight years (versus five in S. 15) and would allow
    the Secretary discretion to provide a 10 percent advance to
    companies developing new products. Those provisions would
    accelerate spending relative to S. 15.
        On June 6, 2003, CBO transmitted a cost estimate for H.R.
    2122 as ordered reported by the House Committee on Energy and
    Commerce on May 15, 2003. That version of H.R. 2122 is nearly
    identical to the version of H.R. 2122 approved by the Committee
    on Government Reform. CBO's estimates of the costs of the two
    versions of H.R. 2122 are identical.
        Intergovernmental and private-sector impact: H.R. 2122
    contains no intergovernmental or private-sector mandates as
    defined in UMRA and would impose no costs on state, local, or
    tribal governments.
        Estimate prepared by: Federal costs: Jeanne De Sa and Sam
    Papenfuss; impact on state, local, and tribal governments: Leo
    Lex; Impact on the private sector: Samuel Kina.
        Estimate approved by: Robert A. Sunshine, Assistant
    Director for Budget Analysis.

             Changes in Existing Law Made by the Bill, as Reported

      In compliance with clause 3(e) of rule XIII of the Rules of
    the House of Representatives, changes in existing law made by
    the bill, as reported, are shown as follows (existing law
    proposed to be omitted is enclosed in black brackets, new
    matter is printed in italic, existing law in which no change is
    proposed is shown in roman):

    PUBLIC HEALTH SERVICE ACT

               *       *       *       *       *       *       *

    TITLE III--GENERAL POWERS AND DUTIES OF PUBLIC HEALTH SERVICE

               *       *       *       *       *       *       *

    Part B--Federal-State Cooperation

               *       *       *       *       *       *       *

    SEC. 319F-1. AUTHORITY FOR USE OF CERTAIN PROCEDURES REGARDING
                        BIOMEDICAL COUNTERMEASURE RESEARCH AND DEVELOPMENT
                        ACTIVITIES.

      (a) In General.--
              (1) Authority.--In conducting and supporting research
            and development activities regarding biomedical
            countermeasures under section 319F(h), the Secretary
            may conduct and support such activities in accordance
            with this section if the activities concern qualified
            countermeasures.
              (2) Qualified countermeasure.--For purposes of this
            section, the term ``qualified countermeasure'' means a
            priority countermeasure (as defined in section 319F(h))
            that affects national security.
              (3) Interagency cooperation.--
                      (A) In general.--In carrying out activities
                    under this section, the Secretary is
                    authorized, subject to subparagraph (B), to
                    enter into interagency agreements and other
                    collaborative undertakings with other agencies
                    of the United States Government.
                      (B) Limitation.--An agreement or undertaking
                    under this paragraph shall not authorize
                    another agency to exercise the authorities
                    provided by this section.
              (4) Availability of facilities to the secretary.--In
            any grant or cooperative agreement entered into under
            the authority provided in this section with respect to
            a biocontainment laboratory or other related or
            ancillary specialized research facility that the
            Secretary determines necessary for the purpose of
            performing, administering, and supporting qualified
            countermeasure research and development, the Secretary
            may provide that the facility that is the object of
            such grant or cooperative agreement shall be available
            as needed to the Secretary to respond to public health
            emergencies affecting national security.
      (b) Expedited Procurement Authority.--
              (1) Increased simplified acquisition threshold for
            biomedical countermeasure procurements.--
                      (A) In general.--For any procurement by the
                    Secretary of property or services for use (as
                    determined by the Secretary) in performing,
                    administering, or supporting qualified
                    countermeasure research or development
                    activities under this section that the
                    Secretary determines necessary to respond to
                    pressing research and development needs under
                    this section, the amount specified in section
                    4(11) of the Office of Federal Procurement
                    Policy Act (41 U.S.C. 403(11)), as applicable
                    pursuant to section 302A(a) of the Federal
                    Property and Administrative Services Act of
                    1949 (41 U.S.C. 252a(a)), shall be deemed to be
                    $25,000,000 in the administration, with respect
                    to such procurement, of--
                              (i) section 303(g)(1)(A) of the
                            Federal Property and Administrative
                            Services Act of 1949 (41 U.S.C.
                            253(g)(1)(A)) and its implementing
                            regulations; and
                              (ii) section 302A(b) of such Act (41
                            U.S.C. 252a(b)) and its implementing
                            regulations.
                      (B) Application of certain provisions.--
                    Notwithstanding subparagraph (A) and the
                    provision of law and regulations referred to in
                    such subparagraph, each of the following
                    provisions shall apply to procurements
                    described in this paragraph to the same extent
                    that such provisions would apply to such
                    procurements in the absence of subparagraph
                    (A):
                              (i) Chapter 37 of title 40, United
                            States Code (relating to contract work
                            hours and safety standards).
                              (ii) Subsections (a) and (b) of
                            section 7 of the Anti-Kickback Act of
                            1986 (41 U.S.C. 57(a) and (b)).
                              (iii) Section 304C of the Federal
                            Property and Administrative Services
                            Act of 1949 (41 U.S.C. 254d) (relating
                            to the examination of contractor
                            records).
                      (C) Internal controls to be instituted.--The
                    Secretary shall institute appropriate internal
                    controls for procurements that are under this
                    paragraph, including requirements with regard
                    to documenting the justification for use of the
                    authority in this paragraph.
              (2) Other than full and open competition.--(A) In
            using the authority provided in section 303(c)(1) of
            title III of the Federal Property and Administrative
            Services Act of 1949 (41 U.S.C. 253(c)(1)) to use
            procedures other than competitive procedures in the
            case of a procurement described in paragraph (1) of
            this subsection, the phrase ``available from only one
            responsible source'' in such section 303(c)(1) shall be
            deemed to mean ``available from only one responsible
            source or only from a limited number of responsible
            sources''.
              (B) The authority under subparagraph (A) is in
            addition to any other authority to use procedures other
            than competitive procedures.
              (C) The Secretary shall implement this paragraph in
            accordance with applicable government-wide regulations,
            including requirements that offers be solicited from as
            many potential sources as is practicable under the
            circumstances, that required notices be published, and
            that submitted offers be considered.
              (3) Increased micropurchase threshold.--
                      (A) In general.--For a procurement described
                    by paragraph (1), the amount specified in
                    subsections (c), (d), and (f) of section 32 of
                    the Office of Federal Procurement Policy Act
                    (41 U.S.C. 428) shall be deemed to be $15,000
                    in the administration of that section with
                    respect to such procurement.
                      (B) Internal controls to be instituted.--The
                    Secretary shall institute appropriate internal
                    controls for purchases that are under this
                    paragraph and that are greater than $2,500.
                      (C) Exception to preference for purchase card
                    mechanism.--No provision of law establishing a
                    preference for using a Government purchase card
                    method for purchases shall apply to purchases
                    that are under this paragraph and that are
                    greater than $2,500.
      (c) Authority To Expedite Peer Review.--
              (1) In general.--The Secretary may, as the Secretary
            determines necessary to respond to pressing qualified
            countermeasure research and development needs under
            this section, employ such expedited peer review
            procedures (including consultation with appropriate
            scientific experts) as the Secretary, in consultation
            with the Director of NIH, deems appropriate to obtain
            assessment of scientific and technical merit and likely
            contribution to the field of qualified countermeasure
            research, in place of the peer review and advisory
            council review procedures that would be required under
            sections 301(a)(3), 405(b)(1)(B), 405(b)(2),
            406(a)(3)(A), 492, and 494, as applicable to a grant,
            contract, or cooperative agreement--
                      (A) that is for performing, administering, or
                    supporting qualified countermeasure research
                    and development activities; and
                      (B) the amount of which is not greater than
                    $1,500,000.
              (2) Subsequent phases of research.--The Secretary's
            determination of whether to employ expedited peer
            review with respect to subsequent phases of a research
            grant or cooperative agreement under this section shall
            be determined without regard to the peer review
            procedures used for any prior peer review of that same
            grant or cooperative agreement.
      (d) Authority for Personal Services Contracts.--
              (1) In general.--For the purpose of performing,
            administering, and supporting qualified countermeasure
            research and development activities, the Secretary may,
            as the Secretary determines necessary to respond to
            pressing qualified countermeasure research and
            development needs under this section, obtain by
            contract (in accordance with section 3109 of title 5,
            United States Code, but without regard to the
            limitations in such section on the period of service
            and on pay) the personal services of experts or
            consultants who have scientific or other professional
            qualifications, except that in no case shall the
            compensation provided to any such expert or consultant
            exceed the daily equivalent of the annual rate of
            compensation for the President.
              (2) Federal tort claims act coverage.--
                      (A) In general.--A person carrying out a
                    contract under paragraph (1), and an officer,
                    employee, or governing board member of such
                    person, shall be deemed to be an employee of
                    the Department of Health and Human Services for
                    purposes of claims under sections 1346(b) and
                    2672 of title 28, United States Code, for money
                    damages for personal injury, including death,
                    resulting from performance of functions under
                    such contract.
                      (B) Exclusivity of remedy.--The remedy
                    provided by subparagraph (A) shall be exclusive
                    of any other civil action or proceeding by
                    reason of the same subject matter against the
                    person, officer, employee, or governing board
                    member.
              (3) Internal controls to be instituted.--
                      (A) In general.--The Secretary shall
                    institute appropriate internal controls for
                    contracts under this subsection, including
                    procedures for the Secretary to make a
                    determination of whether a person, or an
                    officer, employee, or governing board member of
                    a person, is deemed to be an employee of the
                    Department of Health and Human Services
                    pursuant to paragraph (2).
                      (B) Determination of employee status to be
                    final.--A determination by the Secretary under
                    subparagraph (A) that a person, or an officer,
                    employee, or governing board member of a
                    person, is or is not deemed to be an employee
                    of the Department of Health and Human Services
                    shall be final and binding on the Secretary and
                    the Attorney General and other parties to any
                    civil action or proceeding.
              (4) Number of personal services contracts limited.--
            The number of experts and consultants whose personal
            services are obtained under paragraph (1) shall not
            exceed 30 at any time.
      (e) Streamlined Personnel Authority.--
              (1) In general.--In addition to any other personnel
            authorities, the Secretary may, as the Secretary
            determines necessary to respond to pressing qualified
            countermeasure research and development needs under
            this section, without regard to such provisions of
            title 5, United States Code, governing appointments in
            the competitive service, and without regard to the
            provisions of chapter 51 and subchapter III of chapter
            53 of such title relating to classification and General
            Schedule pay rates, appoint professional and technical
            employees, not to exceed 30 such employees at any time,
            to positions in the National Institutes of Health to
            perform, administer, or support qualified
            countermeasure research and development activities in
            carrying out this section.
              (2) Internal controls to be instituted.--The
            Secretary shall institute appropriate internal controls
            for appointments under this subsection.
      (f) Actions Committed to Agency Discretion.--Actions by the
    Secretary under the authority of this section are committed to
    agency discretion.
      (g) Effect on Right To File Protest.--Nothing in this section
    shall affect the right of an interested party to file a protest
    with the contracting agency, to file a protest with the
    Comptroller General under subchapter V of chapter 35 of title
    31, United States Code, or to file an action in the United
    States Court of Federal Claims under section 1491(b) of title
    28, United States Code.

    SEC. 319F-2. STRATEGIC NATIONAL STOCKPILE.

      (a) Strategic National Stockpile.--
              (1) In general.--The Secretary of Homeland Security
            (referred to in this section as the ``Homeland Security
            Secretary''), in coordination with the Secretary and
            the Secretary of Veterans Affairs, shall maintain a
            stockpile or stockpiles of drugs, vaccines and other
            biological products, medical devices, and other
            supplies in such numbers, types, and amounts as are
            determined by the Secretary to be appropriate and
            practicable, taking into account other available
            sources, to provide for the emergency health security
            of the United States, including the emergency health
            security of children and other vulnerable populations,
            in the event of a bioterrorist attack or other public
            health emergency.
              (2) Procedures.--The Secretary, in managing the
            stockpile under paragraph (1), shall--
                      (A) consult with the working group under
                    section 319F(a);
                      (B) ensure that adequate procedures are
                    followed with respect to such stockpile for
                    inventory management and accounting, and for
                    the physical security of the stockpile;
                      (C) in consultation with Federal, State, and
                    local officials, take into consideration the
                    timing and location of special events;
                      (D) review and revise, as appropriate, the
                    contents of the stockpile on a regular basis to
                    ensure that emerging threats, advanced
                    technologies, and new countermeasures are
                    adequately considered;
                      (E) devise plans for the effective and timely
                    supply-chain management of the stockpile, in
                    consultation with appropriate Federal, State
                    and local agencies, and the public and private
                    health care infrastructure; and
                      (F) ensure the adequate physical security of
                    the stockpile.
      (b) Smallpox Vaccine Development.--
              (1) In general.--The Secretary shall award contracts,
            enter into cooperative agreements, or carry out such
            other activities as may reasonably be required in order
            to ensure that the stockpile under subsection (a)
            includes an amount of vaccine against smallpox as
            determined by such Secretary to be sufficient to meet
            the health security needs of the United States.
              (2) Rule of construction.--Nothing in this section
            shall be construed to limit the private distribution,
            purchase, or sale of vaccines from sources other than
            the stockpile described in subsection (a).
      (c) Additional Authority Regarding Procurement of Certain
    Biomedical Countermeasures; Availability of Special Reserve
    Fund.--
              (1) In general.--
                      (A) Use of fund.--A security countermeasure
                    may, in accordance with this subsection, be
                    procured with amounts in the special reserve
                    fund under paragraph (10).
                      (B) Security countermeasure.--For purposes of
                    this subsection, the term ``security
                    countermeasure'' means a priority
                    countermeasure (as defined in section
                    319F(h))--
                              (i) that affects national security;
                              (ii) that is determined under
                            paragraph (2)(B)(ii) to be a necessary
                            countermeasure; and
                              (iii)(I) that is approved or cleared
                            under chapter V of the Federal Food,
                            Drug, and Cosmetic Act, or licensed
                            under section 351 of this Act, for use
                            as a countermeasure to a chemical,
                            biological, radiological, or nuclear
                            agent identified as a material threat
                            under paragraph (2)(A)(ii); or
                              (II) for which the Secretary
                            determines that sufficient and
                            satisfactory clinical experience or
                            research data (including data, if
                            available, from pre-clinical and
                            clinical trials) support a reasonable
                            conclusion that the countermeasure will
                            qualify for approval or licensing after
                            the date of a determination under
                            paragraph (5).
              (2) Determination of material threats.--
                      (A) Material threat.--The Homeland Security
                    Secretary, in consultation with the heads of
                    other agencies as appropriate, shall on an
                    ongoing basis--
                              (i) assess current and emerging
                            threats of chemical, biological,
                            radiological, and nuclear agents; and
                              (ii) determine which of such agents
                            present a material threat against the
                            United States population.
                      (B) Public health impact; necessary
                    countermeasures.--The Secretary shall on an
                    ongoing basis--
                              (i) assess the potential public
                            health consequences of use against the
                            United States population of agents
                            identified under subparagraph (A)(ii);
                            and
                              (ii) determine, on the basis of such
                            assessment, the agents for which
                            priority countermeasures are necessary
                            to protect the public health from a
                            material threat.
              (3) Assessment of availability and appropriateness of
            countermeasures.--The Secretary, in consultation with
            the Homeland Security Secretary, shall assess on an
            ongoing basis the availability and appropriateness of
            specific countermeasures to address specific threats
            identified under paragraph (2).
              (4) Call for security countermeasures; commitment for
            recommendation for procurement.--
                      (A) Proposal to the president.--If, pursuant
                    to an assessment under paragraph (3), the
                    Homeland Security Secretary and the Secretary
                    make a determination that a security
                    countermeasure would be appropriate, such
                    Secretaries may jointly submit to the President
                    a proposal to--
                              (i) issue a call for the development
                            of such security countermeasure; and
                              (ii) make a commitment that, upon the
                            first development of such security
                            countermeasure that meets the
                            conditions for procurement under
                            paragraph (5), the Secretaries will,
                            based in part on information obtained
                            pursuant to such call, make a
                            recommendation under paragraph (6) that
                            the special reserve fund under
                            paragraph (10) be made available for
                            the procurement of such security
                            countermeasure.
                      (B) Countermeasure specifications.--The
                    Homeland Security Secretary and the Secretary
                    shall, to the extent practicable, include in
                    the proposal under subparagraph (A)--
                              (i) estimated quantity of purchase
                            (in the form of number of doses or
                            number of effective courses of
                            treatments regardless of dosage form);
                              (ii) necessary measures of minimum
                            safety and effectiveness;
                              (iii) estimated price for each dose
                            or effective course of treatment
                            regardless of dosage form; and
                              (iv) other information that may be
                            necessary to encourage and facilitate
                            research, development, and manufacture
                            of the countermeasure or to provide
                            specifications for the countermeasure.
                      (C) Presidential approval.--If the President
                    approves a proposal under subparagraph (A), the
                    Homeland Security Secretary and the Secretary
                    shall make known to persons who may respond to
                    a call for the security countermeasure
                    involved--
                              (i) the call for the countermeasure;
                              (ii) specifications for the
                            countermeasure under subparagraph (B);
                            and
                              (iii) a commitment described in
                            subparagraph (A)(ii).
              (5) Secretary's determination of countermeasures
            appropriate for funding from special reserve fund.--
                      (A) In general.--The Secretary, in accordance
                    with the provisions of this paragraph, shall
                    identify specific security countermeasures that
                    the Secretary determines, in consultation with
                    the Homeland Security Secretary, to be
                    appropriate for inclusion in the stockpile
                    under subsection (a) pursuant to procurements
                    made with amounts in the special reserve fund
                    under paragraph (10) (referred to in this
                    subsection individually as a ``procurement
                    under this subsection'').
                      (B) Requirements.--In making a determination
                    under subparagraph (A) with respect to a
                    security countermeasure, the Secretary shall
                    determine and consider the following:
                              (i) The quantities of the product
                            that will be needed to meet the needs
                            of the stockpile.
                              (ii) The feasibility of production
                            and delivery within five years of
                            sufficient quantities of the product.
                              (iii) Whether there is a lack of a
                            significant commercial market for the
                            product at the time of procurement,
                            other than as a security
                            countermeasure.
              (6) Recommendation for president's approval.--
                      (A) Recommendation for procurement.--In the
                    case of a security countermeasure that the
                    Secretary has, in accordance with paragraphs
                    (2), (3), and (5), determined to be appropriate
                    for procurement under this subsection, the
                    Homeland Security Secretary and the Secretary
                    shall jointly submit to the President, in
                    coordination with the Director of the Office of
                    Management and Budget, a recommendation that
                    the special reserve fund under paragraph (10)
                    be made available for the procurement of such
                    countermeasure.
                      (B) Presidential approval.--The special
                    reserve fund under paragraph (10) is available
                    for a procurement of a security countermeasure
                    only if the President has approved a
                    recommendation under subparagraph (A) regarding
                    the countermeasure.
                      (C) Notice to congress.--The Secretary and
                    the Homeland Security Secretary shall notify
                    the Congress of each decision of the President
                    to approve a recommendation under subparagraph
                    (A). Such notice shall include an explanation
                    of the decision to make available the special
                    reserve fund under paragraph (10) for
                    procurement of such a countermeasure,
                    including, where available, the identification
                    of the potential supplier or suppliers of such
                    countermeasure, and whether other potential
                    suppliers of the same or similar
                    countermeasures were considered and rejected
                    for procurement under this section and the
                    reasons therefor.
                      (D) Subsequent specific countermeasures.--
                    Procurement under this subsection of a security
                    countermeasure for a particular purpose does
                    not preclude the subsequent procurement under
                    this subsection of any other security
                    countermeasure for such purpose if the
                    Secretary has determined under paragraph (5)(A)
                    that such countermeasure is appropriate for
                    inclusion in the stockpile and if, as
                    determined by the Secretary, such
                    countermeasure provides improved safety or
                    effectiveness, or for other reasons enhances
                    preparedness to respond to threats of use of a
                    biological, chemical, radiological, or nuclear
                    agent. Such a determination by the Secretary is
                    committed to agency discretion.
                      (E) Rule of construction.--Recommendations
                    and approvals under this paragraph apply solely
                    to determinations that the special reserve fund
                    under paragraph (10) will be made available for
                    a procurement of a security countermeasure, and
                    not to the substance of contracts for such
                    procurement or other matters relating to awards
                    of such contracts.
              (7) Procurement.--
                      (A) In general.--For purposes of a
                    procurement under this subsection that is
                    approved by the President under paragraph (6),
                    the Homeland Security Secretary and the
                    Secretary shall have responsibilities in
                    accordance with subparagraphs (B) and (C).
                      (B) Interagency agreements.--
                              (i) For procurement.--The Homeland
                            Security Secretary shall enter into an
                            agreement with the Secretary for
                            procurement of a security
                            countermeasure in accordance with the
                            provisions of this paragraph. The
                            special reserve fund under paragraph
                            (10) shall be available for the
                            Secretary's costs of such procurement,
                            other than as provided in clause (ii).
                              (ii) For administrative costs.--The
                            agreement entered into between the
                            Homeland Security Secretary and the
                            Secretary for managing the stockpile
                            under subsection (a) shall provide for
                            reimbursement of the Secretary's
                            administrative costs relating to
                            procurements under this subsection.
                      (C) Procurement.--
                              (i) In general.--The Secretary shall
                            be responsible for--
                                      (I) arranging for procurement
                                    of a security countermeasure,
                                    including negotiating terms
                                    (including quantity, production
                                    schedule, and price) of, and
                                    entering into, contracts and
                                    cooperative agreements, and for
                                    carrying out such other
                                    activities as may reasonably be
                                    required, in accordance with
                                    the provisions of this
                                    subparagraph; and
                                      (II) promulgating regulations
                                    to implement clauses (v), (vi),
                                    and (vii), and any other
                                    provisions of this subsection.
                              (ii) Contract terms.--A contract for
                            procurements under this subsection
                            shall (or, as specified below, may)
                            include the following terms:
                                      (I) Payment conditioned on
                                    substantial delivery.--The
                                    contract shall provide that no
                                    payment may be made until
                                    delivery has been made of a
                                    substantial portion (as
                                    determined by the Secretary) of
                                    the total number of units
                                    contracted for, except that,
                                    notwithstanding any other
                                    provision of law, the contract
                                    may provide that, if the
                                    Secretary determines (in the
                                    Secretary's discretion) that an
                                    advance payment is necessary to
                                    ensure success of a project,
                                    the Secretary may pay an
                                    amount, not to exceed 10
                                    percent of the contract amount,
                                    in advance of delivery. The
                                    contract shall provide that
                                    such advance payment is
                                    required to be repaid if there
                                    is a failure to perform under
                                    the contract, except in special
                                    circumstances as determined by
                                    the Secretary on a contract by
                                    contract basis.
                                      (II) Contract duration.--The
                                    contract shall be for a period
                                    not to exceed five years,
                                    except that, in first awarding
                                    the contract, the Secretary may
                                    provide for a longer duration,
                                    not exceeding eight years, if
                                    the Secretary determines that
                                    complexities or other
                                    difficulties in performance
                                    under the contract justify such
                                    a period. The contract shall be
                                    renewable for additional
                                    periods, none of which shall
                                    exceed five years.
                                      (III) Storage by vendor.--The
                                    contract may provide that the
                                    vendor will provide storage for
                                    stocks of a product delivered
                                    to the ownership of the Federal
                                    Government under the contract,
                                    for such period and under such
                                    terms and conditions as the
                                    Secretary may specify, and in
                                    such case amounts from the
                                    special reserve fund under
                                    paragraph (10) shall be
                                    available for costs of
                                    shipping, handling, storage,
                                    and related costs for such
                                    product.
                              (iii) Availability of simplified
                            acquisition procedures.--
                                      (I) In general.--If the
                                    Secretary determines that there
                                    is a pressing need for a
                                    procurement of a specific
                                    countermeasure, the amount of
                                    the procurement under this
                                    subsection shall be deemed to
                                    be below the threshold amount
                                    specified in section 4(11) of
                                    the Office of Federal
                                    Procurement Policy Act (41
                                    U.S.C. 403(11)), for purposes
                                    of application to such
                                    procurement, pursuant to
                                    section 302A(a) of the Federal
                                    Property and Administrative
                                    Services Act of 1949 (41 U.S.C.
                                    252a(a)), of--
                                              (aa) section
                                            303(g)(1)(A) of the
                                            Federal Property and
                                            Administrative Services
                                            Act of 1949 (41 U.S.C.
                                            253(g)(1)(A)) and its
                                            implementing
                                            regulations; and
                                              (bb) section 302A(b)
                                            of such Act (41 U.S.C.
                                            252a(b)) and its
                                            implementing
                                            regulations.
                                      (II) Application of certain
                                    provisions.--Notwithstanding
                                    subclause (I) and the provision
                                    of law and regulations referred
                                    to in such clause, each of the
                                    following provisions shall
                                    apply to procurements described
                                    in this clause to the same
                                    extent that such provisions
                                    would apply to such
                                    procurements in the absence of
                                    subclause (I):
                                              (aa) Chapter 37 of
                                            title 40, United States
                                            Code (relating to
                                            contract work hours and
                                            safety standards).
                                              (bb) Subsections (a)
                                            and (b) of section 7 of
                                            the Anti-Kickback Act
                                            of 1986 (41 U.S.C.
                                            57(a) and (b)).
                                              (cc) Section 304C of
                                            the Federal Property
                                            and Administrative
                                            Services Act of 1949
                                            (41 U.S.C. 254d)
                                            (relating to the
                                            examination of
                                            contractor records).
                              (iv) Other than full and open
                            competition.--(I) In using the
                            authority provided in section 303(c)(1)
                            of title III of the Federal Property
                            and Administrative Services Act of 1949
                            (41 U.S.C. 253(c)(1)) to use procedures
                            other than competitive procedures in
                            the case of a procurement under this
                            subsection, the phrase ``available from
                            only one responsible source'' in such
                            section 303(c)(1) shall be deemed to
                            mean ``available from only one
                            responsible source or only from a
                            limited number of responsible
                            sources''.
                              (II) The authority under subclause
                            (I) is in addition to any other
                            authority to use procedures other than
                            competitive procedures.
                              (III) The Secretary shall implement
                            this clause in accordance with
                            applicable government-wide regulations,
                            including requirements that offers be
                            solicited from as many potential
                            sources as is practicable under the
                            circumstances, that required notices be
                            published, and that submitted offers be
                            considered.
                              (v) Premium provision in multiple
                            award contracts.--
                                      (I) In general.--If, under
                                    this subsection, the Secretary
                                    enters into contracts with more
                                    than one vendor to procure a
                                    security countermeasure, such
                                    Secretary may, notwithstanding
                                    any other provision of law,
                                    include in each of such
                                    contracts a provision that--
                                              (aa) identifies an
                                            increment of the total
                                            quantity of security
                                            countermeasure
                                            required, whether by
                                            percentage or by
                                            numbers of units; and
                                              (bb) promises to pay
                                            one or more specified
                                            premiums based on the
                                            priority of such
                                            vendors' production and
                                            delivery of the
                                            increment identified
                                            under item (aa), in
                                            accordance with the
                                            terms and conditions of
                                            the contract.
                                      (II) Determination of
                                    government's requirement not
                                    reviewable.--If the Secretary
                                    includes in each of a set of
                                    contracts a provision as
                                    described in subclause (I),
                                    such Secretary's determination
                                    of the total quantity of
                                    security countermeasure
                                    required, and any amendment of
                                    such determination, is
                                    committed to agency discretion.
                              (vi) Extension of closing date for
                            receipt of proposals not reviewable.--A
                            decision by the Secretary to extend the
                            closing date for receipt of proposals
                            for a procurement under this subsection
                            is committed to agency discretion.
                              (vii) Limiting competition to sources
                            responding to request for
                            information.--In conducting a
                            procurement under this subsection, the
                            Secretary may exclude a source that has
                            not responded to a request for
                            information under section 303A(a)(1)(B)
                            of the Federal Property and
                            Administrative Services Act of 1949 (41
                            U.S.C. 253a(a)(1)(B)) if such request
                            has given notice that the Secretary may
                            so exclude such a source.
              (8) Interagency cooperation.--
                      (A) In general.--In carrying out activities
                    under this section, the Homeland Security
                    Secretary and the Secretary are authorized,
                    subject to subparagraph (B), to enter into
                    interagency agreements and other collaborative
                    undertakings with other agencies of the United
                    States Government.
                      (B) Limitation.--An agreement or undertaking
                    under this paragraph shall not authorize
                    another agency to exercise the authorities
                    provided by this section to the Homeland
                    Security Secretary or to the Secretary.
              (9) Restrictions on use of funds.--Amounts in the
            special reserve fund under paragraph (10) shall not be
            used to pay--
                      (A) costs for the purchase of vaccines under
                    procurement contracts entered into before the
                    date of the enactment of the Project BioShield
                    Act of 2003; or
                      (B) administrative costs.
              (10) Special reserve fund.--For purposes of this
            subsection, the term ``special reserve fund'' has the
            meaning given such term in section 510 of the Homeland
            Security Act of 2002.
      (d) Disclosures.--No Federal agency shall disclose under
    section 552, United States Code, any information identifying
    the location at which materials in the stockpile under
    subsection (a) are stored.
      (e) Definition.--For purposes of subsection (a), the term
    ``stockpile'' includes--
              (1) a physical accumulation (at one or more
            locations) of the supplies described in subsection (a);
            or
              (2) a contractual agreement between the Homeland
            Security Secretary and a vendor or vendors under which
            such vendor or vendors agree to provide to such
            Secretary supplies described in subsection (a).
      (f) Authorization of Appropriations.--
              (1) Strategic national stockpile.--For the purpose of
            carrying out subsection (a), there are authorized to be
            appropriated $640,000,000 for fiscal year 2002, and
            such sums as may be necessary for each of fiscal years
            2003 through 2006. Such authorization is in addition to
            amounts in the special reserve fund under subsection
            (c)(10).
              (2) Smallpox vaccine development.--For the purpose of
            carrying out subsection (b), there are authorized to be
            appropriated $509,000,000 for fiscal year 2002, and
            such sums as may be necessary for each of fiscal years
            2003 through 2006.

    TITLE IV--NATIONAL RESEARCH INSTITUTES

               *       *       *       *       *       *       *

    Part E--Other Agencies of NIH

               *       *       *       *       *       *       *

    SEC. 481A. BIOMEDICAL AND BEHAVIORAL RESEARCH FACILITIES.

      (a) Modernization and Construction of Facilities.--
              (1) In general.--The Director of NIH, acting through
            the Director of the Center or the Director of the
            National Institute of Allergy and Infectious Diseases,
            may make grants or contracts to public and nonprofit
            private entities to expand, remodel, renovate, or alter
            existing research facilities or construct new research
            facilities, subject to the provisions of this section.

               *       *       *       *       *       *       *

      (c) Requirements for Grants.--
              (1) In general.--The Director of the Center or the
            Director of the National Institute of Allergy and
            Infectious Diseases may make a grant under subsection
            (a) only if the applicant for the grant meets the
            following conditions:
                      (A) * * *

               *       *       *       *       *       *       *

              (2) Institutions of emerging excellence.--From the
            amount appropriated under [subsection (i)] subsection
            (i)(1) for a fiscal year up to $50,000,000, the
            Director of the Center shall make available 25 percent
            of such amount, and from the amount appropriated under
            such subsection for a fiscal year that is over
            $50,000,000, the Director of the Center shall make
            available up to 25 percent of such amount, for grants
            under subsection (a) to applicants that in addition to
            meeting the requirements established in paragraph (1),
            have demonstrated emerging excellence in biomedical or
            behavioral research, as follows:
                      (A) * * *

               *       *       *       *       *       *       *

      (d) Requirement of Application.--The Director of the Center
    or the Director of the National Institute of Allergy and
    Infectious Diseases may make a grant under subsection (a) only
    if an application for the grant is submitted to the Director
    and the application is in such form, is made in such manner,
    and contains such agreements, assurances, and information as
    the Director determines to be necessary to carry out this
    section.
      (e) Amount of Grant; Payments.--
              (1) Amount.--The amount of any grant awarded under
            subsection (a) shall be determined by the Director of
            the Center or the Director of the National Institute of
            Allergy and Infectious Diseases, except that such
            amount shall not exceed--
                      (A) 50 percent (or, in the case of the
                    Institute, 75 percent) of the necessary cost of
                    the construction of a proposed facility as
                    determined by the Director; or
                      (B) in the case of a multipurpose facility,
                    40 percent (or, in the case of the Institute,
                    75 percent) of that part of the necessary cost
                    of construction that the Director determines to
                    be proportionate to the contemplated use of the
                    facility.
              (2) Reservation of amounts.--On the approval of any
            application for a grant under subsection (a), the
            Director of the Center or the Director of the National
            Institute of Allergy and Infectious Diseases shall
            reserve, from any appropriation available for such
            grants, the amount of such grant, and shall pay such
            amount, in advance or by way of reimbursement, and in
            such installments consistent with the construction
            progress, as the Director may determine appropriate.
            The reservation of any amount by the Director under
            this paragraph may be amended by the Director, either
            on the approval of an amendment of the application or
            on the revision of the estimated cost of construction
            of the facility.

               *       *       *       *       *       *       *

              (4) Waiver of limitations.--The limitations imposed
            under paragraph (1) may be waived at the discretion of
            the Director of the Center or the Director of the
            National Institute of Allergy and Infectious Diseases
            for applicants meeting the conditions described in
            subsection (c).
      (f ) Recapture of Payments.--If, not later than 20 years
    after the completion of construction for which a grant has been
    awarded under subsection (a)--
              (1) in the case of an award by the Director of the
            Center, the applicant or other owner of the facility
            shall cease to be a public or non profit private
            entity; or
              (2) the facility shall cease to be used for the
            research purposes for which it was constructed (unless
            the Director of the Center or the Director of the
            National Institute of Allergy and Infectious Diseases
            determines, in accordance with regulations, that there
            is good cause for releasing the applicant or other
            owner from obligation to do so),
    the United States shall be entitled to recover from the
    applicant or other owner of the facility the amount bearing the
    same ratio to the current value (as determined by an agreement
    between the parties or by action brought in the United States
    District Court for the district in which such facility is
    situated) of the facility as the amount of the Federal
    participation bore to the cost of the construction of such
    facility.

               *       *       *       *       *       *       *

      (i) Authorization of [Appropriations.--For the purpose of
    carrying out this section,] Appropriations.--
              (1) Center.--For the purpose of carrying out this
            section with respect to the Center, there are
            authorized to be appropriated $250,000,000 for fiscal
            year 2001, and such sums as may be necessary for each
            of the fiscal years 2002 and 2003.
              (2) National institute of allergy and infectious
            diseases.--For the purpose of carrying out this section
            with respect to the National Institute of Allergy and
            Infectious Diseases, there are authorized to be
            appropriated such sums as may be necessary for fiscal
            year 2003.
                                  ----------

                SECTION 510 OF THE HOMELAND SECURITY ACT OF 2002

    SEC. 510. PROCUREMENT OF SECURITY COUNTERMEASURES FOR STRATEGIC
                        NATIONAL STOCKPILE.

      (a) Authorization of Appropriations.--For procurement of
    security countermeasures under section 319F-2(c) of the Public
    Health Service Act (referred to in this section as the
    ``security countermeasures program''), there is authorized to
    be appropriated up to $5,593,000,000 for the fiscal years 2004
    through 2013. Of the amounts appropriated under the preceding
    sentence, not to exceed $3,418,000,000 may be obligated during
    the fiscal years 2004 through 2008, of which not to exceed
    $890,000,000 may be obligated during fiscal year 2004.
      (b) Special Reserve Fund.--For purposes of the security
    countermeasures program, the term ``special reserve fund''
    means the appropriations account established as a result of any
    appropriations made under subsection (a).
      (c) Availability.--
              (1) Duration of availability for obligation.--Subject
            to paragraph (2), all amounts appropriated under
            subsection (a) are available for obligation through the
            end of fiscal year 2013, provided that any portion of
            such amount that remains unobligated for such purposes
            on the expiration of such term shall be returned to the
            United States Treasury and shall not be available for
            subsequent obligation for any purpose.
              (2) Initial availability for particular
            procurements.--Amounts appropriated under subsection
            (a) become available for a procurement under the
            security countermeasures program only upon the approval
            by the President of such availability for the
            procurement in accordance with paragraph (6)(B) of such
            program.
                                  ----------

     PUBLIC HEALTH SECURITY AND BIOTERRORISM PREPAREDNESS AND RESPONSE ACT
                                    OF 2002

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

      (a) * * *
      (b) Table of Contents.--The table of contents of the Act is
    as follows:

    Sec. 1. Short title; table of contents.

    TITLE I--NATIONAL PREPAREDNESS FOR BIOTERRORISM AND OTHER PUBLIC HEALTH
                                   EMERGENCIES

         * * * * * * *

       Subtitle B--Strategic National Stockpile; Development of Priority
                                 Countermeasures

    [Sec. 121. Strategic national stockpile.]
         * * * * * * *

    [SEC. 121. STRATEGIC NATIONAL STOCKPILE.

      [(a) Strategic National Stockpile.--
              [(1) In general.--The Secretary of Health and Human
            Services (referred to in this section as the
            ``Secretary''), in coordination with the Secretary of
            Veterans Affairs, shall maintain a stockpile or
            stockpiles of drugs, vaccines and other biological
            products, medical devices, and other supplies in such
            numbers, types, and amounts as are determined by the
            Secretary to be appropriate and practicable, taking
            into account other available sources, to provide for
            the emergency health security of the United States,
            including the emergency health security of children and
            other vulnerable populations, in the event of a
            bioterrorist attack or other public health emergency.
              [(2) Procedures.--The Secretary, in managing the
            stockpile under paragraph (1), shall--
                      [(A) consult with the working group under
                    section 319F(a) of the Public Health Service
                    Act;
                      [(B) ensure that adequate procedures are
                    followed with respect to such stockpile for
                    inventory management and accounting, and for
                    the physical security of the stockpile;
                      [(C) in consultation with Federal, State, and
                    local officials, take into consideration the
                    timing and location of special events;
                      [(D) review and revise, as appropriate, the
                    contents of the stockpile on a regular basis to
                    ensure that emerging threats, advanced
                    technologies, and new countermeasures are
                    adequately considered;
                      [(E) devise plans for the effective and
                    timely supply-chain management of the
                    stockpile, in consultation with appropriate
                    Federal, State and local agencies, and the
                    public and private health care infrastructure;
                    and
                      [(F) ensure the adequate physical security of
                    the stockpile.
      [(b) Smallpox Vaccine Development.--
              [(1) In general.--The Secretary shall award
            contracts, enter into cooperative agreements, or carry
            out such other activities as may reasonably be required
            in order to ensure that the stockpile under subsection
            (a) includes an amount of vaccine against smallpox as
            determined by the Secretary to be sufficient to meet
            the health security needs of the United States.
              [(2) Rule of construction.--Nothing in this section
            shall be construed to limit the private distribution,
            purchase, or sale of vaccines from sources other than
            the stockpile described in subsection (a).
      [(c) Disclosures.--No Federal agency shall disclose under
    section 552, United States Code, any information identifying
    the location at which materials in the stockpile under
    subsection (a) are stored.
      [(d) Definition.--For purposes of subsection (a), the term
    ``stockpile'' includes--
              [(1) a physical accumulation (at one or more
            locations) of the supplies described in subsection (a);
            or
              [(2) a contractual agreement between the Secretary
            and a vendor or vendors under which such vendor or
            vendors agree to provide to the Secretary supplies
            described in subsection (a).
      [(e) Authorization of Appropriations.--
              [(1) Strategic national stockpile.--For the purpose
            of carrying out subsection (a), there are authorized to
            be appropriated $640,000,000 for fiscal year 2002, and
            such sums as may be necessary for each of fiscal years
            2003 through 2006.
              [(2) Smallpox vaccine development.--For the purpose
            of carrying out subsection (b), there are authorized to
            be appropriated $509,000,000 for fiscal year 2002, and
            such sums as may be necessary for each of fiscal years
            2003 through 2006.]
                                  ----------

            SECTION 564 OF THE FEDERAL FOOD, DRUG, AND COSMETIC ACT

    SEC. 564. AUTHORIZATION FOR MEDICAL PRODUCTS FOR USE IN EMERGENCIES.

      (a) In General.--
              (1) Emergency uses.--Notwithstanding sections 505,
            510(k), and 515 of this Act and section 351 of the
            Public Health Service Act, and subject to the
            provisions of this section, the Secretary may authorize
            the introduction into interstate commerce, during the
            effective period of a declaration under subsection (b),
            of a drug or device intended for use in an actual or
            potential emergency (referred to in this section as an
            ``emergency use'').
              (2) Approval status of product.--An authorization
            under paragraph (1) may authorize an emergency use of a
            product that--
                      (A) is not approved, licensed, or cleared for
                    commercial distribution under a provision of
                    law referred to in such paragraph (referred to
                    in this section as an ``unapproved product'');
                    or
                      (B) is approved, licensed, or cleared under
                    such a provision, but which use is not under
                    such provision an approved, licensed, or
                    cleared use of the product (referred to in this
                    section as an ``unapproved use of an approved
                    product'').
              (3) Relation to other uses.--An emergency use
            authorized under paragraph (1) for a product is in
            addition to any other use that is authorized for the
            product under a provision of law referred to in such
            paragraph.
              (4) Definitions.--For purposes of this section:
                      (A) The term ``emergency use'' has the
                    meaning indicated for such term in paragraph
                    (1).
                      (B) The term ``product'' means a drug or
                    device.
                      (C) The term ``unapproved product'' has the
                    meaning indicated for such term in paragraph
                    (2)(A).
                      (D) The term ``unapproved use of an approved
                    product'' has the meaning indicated for such
                    term in paragraph (2)(B).
      (b) Declaration of Emergency.--
              (1) In general.--The Secretary may declare an
            emergency justifying the authorization under this
            subsection for a product on the basis of--
                      (A) a determination by the Secretary of
                    Homeland Security that there is a national
                    emergency, or a significant potential for a
                    national emergency, involving a heightened risk
                    of attack with a specified biological,
                    chemical, radiological, or nuclear agent or
                    agents;
                      (B) a determination by the Secretary of
                    Defense that there is a military emergency, or
                    a significant potential for a military
                    emergency, involving a heightened risk to
                    United States military forces of attack with a
                    biological, chemical, radiological, or nuclear
                    agent or agents; or
                      (C) a determination by the Secretary of a
                    public health emergency under section 319 of
                    the Public Health Service Act, affecting
                    national security and involving a specified
                    biological, chemical, radiological, or nuclear
                    agent or agents, or a specified disease or
                    condition that may be attributable to such
                    agent or agents.
              (2) Termination of declaration.--
                      (A) In general.--A declaration under this
                    subsection shall terminate upon the earlier
                    of--
                              (i) a determination by the Secretary,
                            in consultation as appropriate with the
                            Secretary of Homeland Security or the
                            Secretary of Defense, that the
                            circumstances described in paragraph
                            (1) have ceased to exist; or
                              (ii) the expiration of the one-year
                            period beginning on the date on which
                            the declaration is made.
                      (B) Renewal.--Notwithstanding subparagraph
                    (A), the Secretary may renew a declaration
                    under this subsection, and this paragraph shall
                    apply to any such renewal.
              (3) Advance notice of termination.--In terminating a
            declaration under this section, the Secretary shall
            provide advance notice that the declaration will be
            terminated. The period of advance notice shall be a
            period reasonably determined to provide--
                      (A) in the case of an unapproved product, a
                    sufficient period for disposition of shipments
                    of the product, including the return of such
                    shipments to the manufacturer (in the case of a
                    manufacturer that chooses to have the shipments
                    returned); and
                      (B) in the case of unapproved uses of
                    approved products, a sufficient period for the
                    disposition of any labeling that was provided
                    with respect to the emergency use involved.
              (4) Publication.--The Secretary shall promptly
            publish in the Federal Register each declaration,
            determination, and renewal under this subsection.
      (c) Criteria for Issuance of Authorization.--The Secretary
    may issue an authorization under this section with respect to
    the emergency use of a product only if, after consultation with
    the Director of the National Institutes of Health and the
    Director of the Centers for Disease Control and Prevention, to
    the extent feasible and appropriate given the circumstances of
    the emergency involved, the Secretary concludes--
              (1) that an agent specified in a declaration under
            subsection (b) can cause a serious or life-threatening
            disease or condition;
              (2) that, based on the totality of scientific
            evidence available to the Secretary, including data
            from adequate and well-controlled clinical trials, if
            available, it is reasonable to believe that--
                      (A) the product may be effective in
                    detecting, diagnosing, treating, or
                    preventing--
                              (i) such disease or condition; or
                              (ii) a serious or life-threatening
                            disease or condition caused by a
                            product authorized under this section
                            or approved under this Act or the
                            Public Health Service Act, for
                            detecting, diagnosing, treating, or
                            preventing such a disease or condition
                            caused by such an agent; and
                      (B) the known and potential benefits of the
                    product, when used to detect, diagnose,
                    prevent, or treat such disease or condition,
                    outweigh the known and potential risks of the
                    product;
              (3) that there is no adequate, approved, and
            available alternative to the product for detecting,
            diagnosing, preventing, or treating such disease or
            condition; and
              (4) that such other criteria as the Secretary may by
            regulation prescribe are satisfied.
      (d) Scope of Authorization.--
              (1) In general.--An authorization of a product under
            this section shall state--
                      (A) each disease or condition that the
                    product may be used to detect, diagnose,
                    prevent, or treat within the scope of the
                    authorization;
                      (B) the Secretary's conclusions, made under
                    subsection (c)(2)(B), that the known and
                    potential benefits of the product, when used to
                    detect, diagnose, prevent, or treat such
                    disease or condition, outweigh the known and
                    potential risks of the product; and
                      (C) the Secretary's conclusions, made under
                    subsection (c), concerning the safety and
                    potential effectiveness of the product in
                    detecting, diagnosing, preventing, or treating
                    such diseases or conditions, including an
                    assessment of the available scientific
                    evidence.
              (2) Confidential information.--Nothing in this
            section alters or amends section 1905 of title 18,
            United States Code, or section 552(b)(4) of title 5 of
            such Code.
      (e) Conditions of Authorization.--
              (1) Unapproved product.--
                      (A) Required conditions.--With respect to the
                    emergency use of an unapproved product, the
                    Secretary, to the extent feasible given the
                    circumstances of the emergency, shall, for
                    persons who choose to carry out one or more
                    activities for which the authorization is
                    issued, establish such conditions on an
                    authorization under this section as the
                    Secretary finds necessary or appropriate to
                    protect the public health, including the
                    following:
                              (i) Appropriate conditions designed
                            to ensure that, to the extent feasible
                            given the circumstances of the
                            emergency, health care professionals
                            administering the product are
                            informed--
                                      (I) that the Secretary has
                                    authorized the emergency use of
                                    the product;
                                      (II) of the significant known
                                    and potential benefits and
                                    risks of the emergency use of
                                    the product, and of the extent
                                    to which such benefits and
                                    risks are unknown; and
                                      (III) of the alternatives to
                                    the product that are available,
                                    and of their benefits and
                                    risks.
                              (ii) Appropriate conditions designed
                            to ensure that, to the extent feasible
                            given the circumstances of the
                            emergency, individuals to whom the
                            product is administered are informed--
                                      (I) that the Secretary has
                                    authorized the emergency use of
                                    the product;
                                      (II) of the significant known
                                    and potential benefits and
                                    risks of such use, and of the
                                    extent to which such benefits
                                    and risks are unknown; and
                                      (III) of the option to accept
                                    or refuse administration of the
                                    product, of the consequences,
                                    if any, of refusing
                                    administration of the product,
                                    and of the alternatives to the
                                    product that are available and
                                    of their benefits and risks.
                              (iii) Appropriate conditions for the
                            monitoring and reporting of adverse
                            events associated with the emergency
                            use of the product.
                              (iv) For manufacturers of the
                            product, appropriate conditions
                            concerning recordkeeping and reporting,
                            including records access by the
                            Secretary, with respect to the
                            emergency use of the product.
                      (B) Authority for additional conditions.--
                    With respect to the emergency use of an
                    unapproved product, the Secretary, to the
                    extent feasible given the circumstances of the
                    emergency, may, for persons who choose to carry
                    out one or more activities for which the
                    authorization is issued, establish such
                    conditions on an authorization under this
                    section as the Secretary finds necessary or
                    appropriate to protect the public health,
                    including the following:
                              (i) Appropriate conditions on which
                            entities may distribute the product
                            with respect to the emergency use of
                            the product (including limitation to
                            distribution by government entities),
                            and on how distribution is to be
                            performed.
                              (ii) Appropriate conditions on who
                            may administer the product with respect
                            to the emergency use of the product,
                            and on the categories of individuals to
                            whom, and the circumstances under
                            which, the product may be administered
                            with respect to such use.
                              (iii) For persons other than
                            manufacturers of the product,
                            appropriate conditions concerning
                            recordkeeping and reporting, including
                            records access by the Secretary, with
                            respect to the emergency use of the
                            product.
                              (iv) With respect to the emergency
                            use of the product, waive or limit, to
                            the extent appropriate given the
                            circumstances of the emergency,
                            conditions regarding current good
                            manufacturing practice otherwise
                            applicable to the manufacture,
                            processing, packing, or holding of
                            products subject to regulation under
                            this Act, including such requirements
                            established in section 501.
              (2) Unapproved use.--With respect to the emergency
            use of a product that is an unapproved use of an
            approved product:
                      (A) The Secretary may, for manufacturers of
                    the product who choose to carry out one or more
                    activities for which the authorization is
                    issued, establish any of the conditions
                    described in clauses (i) through (iv) of
                    paragraph (1)(A).
                      (B)(i) If the authorization under this
                    section regarding the emergency use authorizes
                    a change in the labeling of the product, but
                    the manufacturer of the product chooses not to
                    make such change, such authorization may not
                    authorize distributors of the product or any
                    other person to alter or obscure the labeling
                    provided by the manufacturer.
                      (ii) In the circumstances described in clause
                    (i), an authorization under this section
                    regarding the emergency use may, for persons
                    who do not manufacture the product and who
                    choose to act under this clause, authorize such
                    persons to provide information on the product
                    in addition to the labeling provided by the
                    manufacturer, subject to compliance with clause
                    (i). Such additional information shall not be
                    considered labeling for purposes of section
                    502.
      (f) Duration of Authorization.--
              (1) In general.--Except as provided in paragraph (2),
            an authorization under this section shall be effective
            until the earlier of the termination of the declaration
            under subsection (b) or a revocation under subsection
            (g).
              (2) Continued use after end of effective period.--An
            authorization shall continue to be effective for
            continued use with respect to patients to whom it was
            administered during the period described by paragraph
            (1), to the extent found necessary by such patients'
            attending physicians.
      (g) Revocation of Authorization.--
              (1) Review.--The Secretary shall periodically review
            the circumstances and the appropriateness of an
            authorization under this section.
              (2) Revocation.--The Secretary may revoke an
            authorization under this section if, in the Secretary's
            unreviewable discretion, the criteria under subsection
            (c) for issuance of such authorization are no longer
            met.
      (h) Publication.--The Secretary shall promptly publish in the
    Federal Register a notice of each authorization, and each
    termination or revocation of an authorization, and an
    explanation of the reasons therefor, under this section.
      (i) Actions Committed to Agency Discretion.--Actions under
    the authority of this section by the Secretary, by the
    Secretary of Defense, or by the Secretary of Homeland Security
    are committed to agency discretion.
      (j) Rules of Construction.--Nothing in this section shall be
    construed to impair or otherwise affect--
              (1) the authority of the President as Commander in
            Chief of the Armed Forces of the United States under
            article II, section 2 of the United States
            Constitution;
              (2) the authority of the Secretary of Defense with
            respect to the Department of Defense, including the
            armed forces, under other provisions of Federal law; or
              (3) the authority of the Secretary under section
            319F-2 to manage the stockpile under such section.
      (k) Application to Members of Armed Forces.--
              (1) Waiver of requirement relating to option to
            refuse.--In the case of administration of a
            countermeasure to members of the armed forces, a
            requirement, under subsection (e)(1)(A)(ii)(III),
            designed to ensure that individuals are informed of an
            option to accept or refuse administration of a product,
            may be waived by the President if the President
            determines, in writing, that complying with such
            requirement is not feasible, is contrary to the best
            interests of the members affected, or is not in the
            interests of national security.
              (2) Provision of information to member of the armed
            forces.--If the Secretary makes a determination that it
            is not feasible for the information required by
            subsection (e)(1)(A)(ii) to be provided to a member of
            the armed forces prior to the administration of the
            product, such information shall be provided to such
            member of the armed forces (or next-of-kin in the case
            of the death of a member) to whom the product was
            administered as soon as possible, but not later than 30
            days, after such administration. Information concerning
            the administration of the product shall be recorded in
            the medical record of the member.
              (3) Effect on statute pertaining to investigational
            new drugs.--In the case of an authorization based on a
            determination by the Secretary of Defense under
            subsection (b)(1)(B), section 1107 of title 10, United
            States Code, shall not apply to use of a product that
            is the subject of such authorization, within the scope
            of such authorization and while such authorization is
            effective.
      (l) Relation to Other Provisions.--If a product is the
    subject of an authorization under this section, the use of such
    product within the scope of the authorization --
              (1) shall not be subject to any requirements pursuant
            to section 505(i) or 520(g); and
              (2) shall not be subject to any requirements
            otherwise applicable to clinical investigations
            pursuant to other provisions of this Act.
      (m) Discretion Regarding Use of Authorization.--Nothing in
    this section provides the Secretary any authority to require
    any person to carry out any activity that becomes lawful
    pursuant to an authorization under this section, and no person
    is required to inform the Secretary that the person will not be
    carrying out such activity, except that a manufacturer of a
    sole-source unapproved product authorized for emergency use
    shall notify the Secretary within a reasonable period of time
    after the issuance by the Secretary of such authorization if
    such manufacturer does not intend to carry out an activity or
    activities under the authorization. This section does not have
    any legal effect on a person who does not carry out any
    activity for which an authorization under this section is
    issued, or who carries out such an activity pursuant to other
    provisions of this Act or section 351 of the Public Health
    Service Act.
      (n) Enforcement.--A person who carries out an activity
    pursuant to an authorization under this section, but who fails
    to comply with applicable conditions under subsection (e), is
    with respect to that act of noncompliance subject to the
    provisions of law specified in subsection (a) and to the
    enforcement of such provisions under section 301.